1951-06-04

[Stage Direction]
BUSINESS	OF	THE	HOUSERight	Hon. L.	S.	St.	Laurent	(PrimeMinister): Mr. Speaker, I wish to advise the house that the government has now been officially	informed	of	the	passage	by	the
United Kingdom parliament on May 31 of the amendment to the British North America Act respecting old age security.
I am sure that hon. members in all parts of the house will share in the satisfaction which I feel at this evidence of the spirit of harmony and	co-operation which	has
marked the joint efforts of the federal government and the various provincial governments in reaching agreement in respect of this important matter. I am sure we would all wish likewise to express appreciation on behalf of the people of Canada, and particularly on behalf of the aged citizens of our country, of the prompt way in which the amendment was enacted by the United Kingdom parliament.
The house will naturally be interested to know the steps which the government intends to take, now that we have the constitutional authority to' implement the proposals made a year ago this month by the parliamentary committee on old age security and offered by the government to the provinces at our conference with them of last December. On February 5, of this year, in reply to a question put to me by the hon. member for Winnipeg North Centre (Mr. Knowles) I stated as follows, as reported at page 72 of Hansard:
... it is and will be the policy of the government to avoid any possible delay when agreement has been reached to have that agreement implemented.
In conformity with that statement of the government's position, I wish to state at this time that it is proposed to introduce legislation at an early day to enable the government to make agreements with the provinces to provide old age security to persons in need between the ages of sixty-five and seventy, and to provide authority for the registration of persons over the age of seventy
for the universal old age pensions. That legislation would probably also at the same time provide for the continuance of federal assistance in the payment of pensions to the blind.
The government wishes to be in a position to commence payment of the universal pension beginning with the month of January, 1952, and we wish also to have our legislation respecting the age group sixty-five to sixty-nine ready for implementation effective in January, 1952, in any of those provinces which will have signed agreement with the federal government for that purpose.
The administrative plans for the application of this new old age security program are already going forward. Registration forms with respect to the universal pensions plan are being prepared, and it is proposed to have the necessary supplies of these forms printed within the next few weeks. A small amount of additional staff will very shortly be recruited to deal with applications for the universal pensions which will be administered by the federal authorities.
Arrangements are now being discussed with the various provincial governments to take from their present old age pensions records the information which will be required to pay the universal pension after January 1, 1952, to the approximately 300,000 persons now receiving old age pensions under the previous legislation. For these persons, no additional applications for the universal pension will be required.
The government wishes to be in a position to commence, as soon as possible after July 1, registration of the others-probably some 400,000 persons-seventy years of age and over who are not at present receiving old age pensions. The Department of National Health and Welfare plans, in the six months between July 1 of this year and January 1, 1952, to deal with these applications through the present family allowance offices with the small additions to staff which are contemplated, and to have their records in shape to enable payments to be made in the first month of the new calendar year.
I am sure that all hon. members who recall the initial registration of a much larger number of cases for family allowances in 1945 will share the government's confidence that the same administrative organization, which is now in the process of being adapted to the requirements of the universal old
[Stage Direction]
Old Age Pensions
age pensions plan, will be able to deal with this new problem in an efficient and expeditious manner. These administrative arrangements are, as I say, already being planned with the aim of pressing them forward as rapidly as possible, and they will be pressed forward as soon as the necessary legislative authority is given to the department to carry out the registration for this purpose.
So far as the legislation to provide for the universal contributory old age pension is concerned, the government has come to the conclusion that, in the light of the heavy load of work already before parliament at this present session, it would not be appropriate to ask parliament to deal with this new and important legislation during the next few weeks. Hon. members are fully aware of the heavy load of work which lies ahead of us, and of the necessity we shall shortly face of holding meetings in the mornings, afternoons and evenings in order to deal with the main estimates now before the house and the other items in the government's legislative program already before parliament, as well as old age security assistance and one or two other urgent matters. .
If the universal contributory old age pension measure were the only legislative proposal which would remain for consideration, the government would be disposed to ask parliament to continue to sit in July until it had been enacted, in the hope that it would not be necessary for parliament to meet again in the present calendar year. But that is not the situation. In addition to the universal old age pensions legislation, there are a number of important measures under consideration, some of which arise out of the report of the royal commission on transportation. In that regard it is the intention of the government to recommend to parliament the implementation of the recommendations of the royal commission to the fullest practicable extent, and that will require many amendments to the present Railway Act. This amending bill will be a very important legislative proposal, and one which should receive the most careful consideration by parliament because of its long term effect on the Canadian economy. It is intended to recommend that the bill be referred to the standing committee on railways, canals and telegraph lines, and that the committee provide an opportunity for representations as to how the proposed amendments might be expected to affect certain interests and localities. We feel that these proposed amendments should be before the public for study and discussion some reasonable time before they are finally dealt with by parliament.

The government in the course of the next few weeks will also have to give consideration to the recommendations of the royal commission on national development in the arts, letters and sciences. This requires some time for careful study by the government, by members of parliament and by the public, though it does not seem unlikely that some legislative provision should be made before the end of this year.
There are a number of other legislative proposals to which the government has been giving thought. Some of these, like the revision of the Consolidated Revenue and Audit Act, have had to be postponed more than once. It is intended to introduce that legislation and to have it referred to the public accounts committee, where it can be fully explained in all its details. That is the act which provides the standard for the control by parliament over the expenditure of public fund's, and we think it is one that is deserving of careful consideration.
In view of all these considerations, the government has come to the conclusion that it would be preferable to make an effort to complete the work now before the house, to conclude the present session as soon as is consistent with the proper dispatch of that business and to adjourn until the beginning of October, with the proviso that we can meet earlier if circumstances make an earlier meeting necessary. If an earlier meeting is not required by unforeseen circumstances, the government would recommend the prorogation of the present session when we meet in October and the immediate commencement of the new session. There would be plenty of public business-mainly legislative-to require a full session, and we would propose to have the session devoted exclusively to government measures, in the hope of overtaking all important arrears and starting with a clean slate in the regular session of 1952.
With respect to old age security, the reason for proceeding with the old age assistance measure in the immediate future is, of course, that it is the part of the old age security program which involves joint action with the provincial governments and we feel that the provincial authorities should know as soon as possible the precise legal basis for the proposed agreements in order to make their own legislative and administrative plans in the light of that knowledge. Of course it is intended' that the old age assistance legislation will come into effect at the same time as the universal pensions.
So far as the universal pensions are concerned, once authority has been given by

parliament for the necessary registration, it will not make the slightest difference to the public whether the main legislation is enacted in July or October. The government believes more careful consideration is likely to be given to this very important measure if it is held over, and holding it over will not make any difference as to the date on which it will come into force. That in either case will be the earliest date which we consider administratively feasible on the advice of our experts in that field, that is to say, January, 1952. That from the very beginning has been the earliest date on which it was considered that it would be feasible to get this new machine rolling, and that information was given to the provincial governments at the dominion-provincial conference of last December.
Moreover, as hon. members know, the universal pensions are to have right from the start a contributory basis. Now, we have not yet completed consideration of the normal budgetary program of the current year, and the government believes it would be an advantage to have a few months to observe the effects of the recent changes in the tax structure before reaching a final decision on all the precise details of the contributory system to be recommended to parliament.
It will be recalled that the joint committee made no precise recommendations on that point, because it was recognized that it was the inescapable responsibility of the government. We want to be as sure as we can that we are making the right proposals for a plan which is going to affect, far into the future, the provision for old age security of the whole Canadian population.
The government intends to place on the order paper with all reasonable dispatch the proposals required to be dealt with by parliament to give effect, if parliament sees fit to do so, to this program I have just announced.
Mr. George A. Drew (Leader of the Opposition):: Mr. Speaker, I am sure that
all hon. members will join in the sentiments expressed by the Prime Minister (Mr. St. Laurent) as to our appreciation of the speed and courtesy with which the parliament at Westminster has dealt with the request put forward for an appropriate amendment to the British North America Act. Undoubtedly they have co-operated in every way to make it possible to proceed with this extremely important legislation which the people of Canada have been seeking for some time.
The Prime Minister has indicated that it is the hope of the government that this legislation shall become law in time to make it possible to begin these payments by January,
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1952. In doing so he has outlined some of the extensive preliminary steps which must be taken to that end. He has indicated the necessity that a period be devoted to registration of those who would be entitled to the universal old age pension to be provided under this new amendment. He has also pointed out that a large number of administrative details must be carefully examined and worked out as between the dominion government and the provincial governments so that this may be done to the satisfaction of the Canadian people generally.
I am not able to agree, however, with the Prime Minister in his statement that it will be just as satisfactory if this bill is dealt with in October. I do not believe that we should leave this house until we have passed the Old Age Pensions Act and made it law. There are very strong reasons why this legislation should be dealt with before we leave this house. The Prime Minister himself suggested a reason why there is a difference between July and October. He pointed out that it was the desire of the dominion government to be ready to make payments in January, 1952, in all those provinces where agreements had already been reached in regard to this measure and the payments under it. I think with that statement all hon. members will be in agreement. But from the very fact that the Prime Minister introduces the qualification that the payment would be made in those provinces where agreements had been reached, it is quite clear that in the mind of the Prime Minister the possibility was contemplated that some of the provinces might not yet have been able to take the necessary preliminary steps to make that practicable and possible.


Mr. St. Laurent:: If I gave the impression
that I was saying that a universal pension would be paid only in those provinces where agreement had been reached, I did not correctly express myself. What I was referring to was that universal pensions would be paid in all the provinces and that we hoped to have the sixty-five to sixty-nine assistance part ready for implementation in those provinces with which agreements will have been made-


George Alexander Drew: If that is-


An hon. Member:: It is.


Louis Stephen St-Laurent: That is clearly the intention of the government. If I did not make that clear before, I wish to do it now.


George Alexander Drew: I paused only because I was going to say that I think the Prime Minister could explain it much better than a number of those who appear to be trying to explain to me what the Prime Minister said.

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I was referring to the fact that the Prime Minister had pointed out the necessity for an extensive discussion of the arrangements which it will be necessary to make for the appropriate handling of payments of this kind. For that reason I think there is a strong argument in favour of dealing with this matter now.
The Prime Minister said that if this were the only legislation to be considered, perhaps there would be no thought given to the procedure he has outlined. It is indicated that there is other legislation which it will be necessary to bring before the house. I would point out that it will be very much easier for the provinces to deal with this matter satisfactorily if the House of Commons passes the legislation, and they know it is to become law, so that they then may be able to give adequate notice of the special sessions they must call for the later months of this year, and, in turn, make the necessary arrangements for implementation in those months.
For those reasons, no matter what view may be held in regard to the other legislation contemplated, I think we should proceed to deal with this legislation while we are still here in Ottawa. The Prime Minister has stated, very properly, that all hon. members will hope and wish that the arrangements made for financing this measure should be given that careful consideration which will assure that the legislation itself and the administrative arrangements are the most satisfactory possible, not only for the older people of the country who are directly affected, but for the Canadian taxpayers generally, who are both interested in the legislation and anxious that it shall be worked out in the most satisfactory way. I do not think there will be any disagreement on that score.
On the other hand I find it difficult to think that this proposal cannot be put before the house some time within the next month, with sufficient knowledge of the general course of the financial position of the government, projected with sufficient accuracy to make it possible to deal with this matter properly at the present time. Later today, in fact, the Minister of Finance will be discussing the bills placed before the house to implement the budgetary provisions, and in doing so will be expressing, I am sure with confidence in the accuracy of his statements, what he expects to be the financial position throughout the remainder of the year. Within the next few weeks he will have still more information. I think there would be adequate information at that time to deal with

provisions in connection with a contributory plan for financing this measure, along with the legislation itself.
As to the time that would be taken to deal with the legislation, I am sure this bill would take very little time when it comes before the house.


Some hon. Members:: Oh, oh.


George Alexander Drew: I am perfectly sure this bill would be adopted with the same speed that a number of other bills have been adopted, when they were good bills, clearly explained, and placed before the house properly and in an orderly way.


Some hon. Members:: Oh, oh.


George Alexander Drew: There is complete agreement as to the introduction of a measure and as to the passing of a measure which has now been approved by all the ten provincial governments. There will be the same measure of unanimity displayed in the house in regard to the bill as was displayed in the house at the time the Prime Minister asked that approval be given to a request to be sent to Westminster for an amendment to the British North America Act for this purpose. After all, we were dealing with the same subject then, and I am sure the same attitude will be adopted in all parts of the house in regard to a measure which implements the purpose of an amendment we all support.
There is another reason why I think hon. members should consider the wisdom of the course indicated. The Prime Minister has informed us that there is under consideration legislation designed to implement the recommendations of the royal commission on transportation. He has also indicated the possibility that there might be legislation to carry into effect some of the recommendations of the royal commission which is generally referred to as the Massey commission. He has indicated that other important legislation is under consideration.
It is not unusual for the house to deal with important legislation. None of these things, however, comes before us with that measure of surprise and urgency with which members of the house were confronted at the end of August last year, when we met in special session. There is nothing to suggest that there is anything to be brought before the house that is not properly to be regarded as regular business of the house. For that reason I find it difficult to understand what justification there can be for the suggestion that we should adjourn, only to meet again for prorogation, and then to have a second session. If it is really necessary to defer any of the business of this house, then I

submit it would be appropriate for the house to adjourn in the usual way and have the session continue in the autumn only for the time necessary to deal with what is left over for further consideration. I am unable to find anything in the explanation given by the	Prime	Minister	that wouldmake it understandable that we should adjourn simply	for the	purpose of
proroguing later, and then have a second session in the same year to deal with the continuing business of this house.


Mr. Cruickshank:: Why the glum looks behind you?


George Alexander Drew: Possibly because the member behind me is looking in the direction from which that voice came.
The business now before the house, Mr. Speaker, can be dealt with, the old age pensions could be dealt with, and the members of this house could decide what course should then be followed. I hope that the government will reconsider its decision, and I hope it will make plans for the remaining business of this session, recognizing that there has been a considerable delay in dealing with the business of this house by reason of the way in which the different subjects have been brought before the house, postponed and then brought forward again. If this house were permitted to deal with each particular subject until it was disposed of, we would go forward much more rapidly than is possible when a subject is introduced, postponed, and new events arise which project a completely new debate. In this way we have two, three and four major debates on the same subject, simply because of the breaks in the consideration of it. For all practical purposes we are about to have a third budget debate this year. This could have been avoided by carrying the debate forward through the various stages, so that when one stage had been disposed of we would go right into the consideration of the same subject in the next stage.
I again urge the Prime Minister, Mr. Speaker, to reconsider the statement he has made concerning the business of the house, recognizing that he has simply placed before us a statement as to what he thinks would be the best manner in which to carry it forward. The Prime Minister has referred to legislation that is extremely important. Everyone will agree with him as to its importance. Whatever his decision and the decision of his colleagues may be in regard to the other matters before them, I can only repeat my request that before we leave this house we proceed to deal with the old age
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pension legislation so that the provinces may have sufficient time to call their legislatures together and pass their laws, and so that all the administrative details may be arranged in plenty of time to carry out the hope of the Prime Minister, and the hope of all of us, that these payments will begin in January of next year.	.


Mr. M. J. Coldwell (Roselown-Biggar):: Mr. Speaker, I am sure all hon. members of the house share the appreciation that was expressed by the Prime Minister (Mr. St. Laurent) and by the leader of the opposition (Mr. Drew) to the parliament at Westminster for having so expeditiously dealt with the constitutional amendment required to make old age pensions universally effective in Canada. I am very happy indeed that the Prime Minister and the government are determined that this legislation shall come into effect on January 1, 1952. It is a matter of very great pleasure to the members of this group, because of the interest we have always taken in this question of old age pensions. My predecessor, the late J. S. Woodsworth, member for Winnipeg North Centre, in 1926 was largely responsible for the introduction of the first old age pension bill. Consequently it is a matter of much satisfaction to us that this legislation has now reached the stage where the senior citizens of this country who have attained the age of seventy may look forward to a pension without a means test as of January 1 of next year. I believe that is in the interests of thrift in this country, because persons who had saved a little something to provide for their old age were penalized because they had made those savings. I am very happy about the changes foreshadowed.
I am glad to note, too, that the Prime Minister and the government are going to introduce the necessary legislation to bring into effect a new allowance for those between the ages of sixty-five and sixty-nine. I was hopeful that the income test which was recommended by the committee last year would be more generous than the present means test. When the bill is before us, that matter will receive considerable attention. I agree with the Prime Minister that this legislation concerning the sixty-five to sixty-nine age group should be introduced now, so that the provinces may call their legislatures together to make any necessary provisions for carrying out their part of the particular measure.
I cannot say that I agree with the leader of the opposition that there is really any particular reason why the old age pension legislation concerning those of seventy and over should be introduced at this session. The

Old Age Pensions
dominion has assumed the over-all responsibility in that' regard, and so long as the legislation is passed by this government and all the necessary preparations are made to enable it to come into effect on January 1, 1952, I am not particular whether the legislation is passed in July or some months subsequently.
With regard to the proposed autumn session of parliament, that is a responsibility that the government must assume. Apparently the government has quite a long list of legislation. I discussed it with my colleagues this morning, and they believe that this legislation, which the Prime Minister was good enough to outline to me, warrants the calling of a session in the autumn.
The experience we have had over the last several years, particularly since the beginning of the war, clearly indicates that membership in this House of Commons can no longer be regarded as something in the nature of a sideline to a particular profession or business. Membership in the House of Commons today is a full-time position, and members must devote their entire time, sooner or later, to the business of the country. May I just add the thought that I believe our sessions should be on an annual basis. I do not like this business of having a session in a given year, and then coming back and having another session later in the same year. I believe we should have one session during a period of twelve months. The time of sitting should be more or less determined early in the sessional year. I feel sorry sometimes for the members of the government, who are undergoing a tremendous strain, because in the very nature of things a member must be experienced and therefore not in the prime of youth or early manhood. I think it is in the interests of the country and of the government and the people of the country that there shall be a summer recess. Sitting as we did during the war in July and August taxed the health of the youngest and most robust members of this house. Personally I think the house should consider what other houses of parliament have considered-an annual session with a summer recess, so that we may know exactly how to make our plans, and so that we may understand the responsibilities we are assuming when we accept membership in the House of Commons or seek the support of our constituents to send us to the House of Commons.
We are indeed very happy that the improved old age pension legislation is to be introduced and will come into effect. The government must decide when it is to be
introduced, but to know that it is to be intro- ' duced and is to come into effect on the first of January, 1952, is a matter of great satisfaction to the members of this group.


Mr. Solon E. Low (Peace River):: Mr. Speaker, it is also a matter of great satisfaction to us that the parliament at Westminster dealt so expeditiously with our request for amendment of the constitution to make it possible for the government to pay universal old age pensions. We also want to congratulate the government on the speed with which they have started the wheels in motion to get ready for the payment of such pensions.
I think that is a matter of great satisfaction to everyone in this house.
The Prime Minister (Mr. St. Laurent) has outlined the program of legislation that is to be dealt with by the house some time this year. I agree that we should not try to push through the summer in an effort to get that legislation completed and made law. I do not see that we could deal properly or carefully with such a program if we were to sit morning, noon and night-as I suppose we shall have to do shortly-through July and August.
My estimate is it would require all the intervening time from now until the end of August to deal with that program as it should be dealt with. For that reason I feel that the government is perfectly justified in asking us to come back this autumn to deal with the program outlined by the Prime Minister. I cannot agree at all with the leader of the opposition (Mr. Drew) that the old age pension legislation should be passed and made law before the house prorogues. I see no particular reason at all why that is necessary. In fact I see some good reasons, especially concerning the financial aspects of the proposal, why the measure should not be dealt with until we have an ample opportunity to study the taxation measures that may be necessary to raise these funds.
I cannot see a chance of giving careful consideration to the financial aspects of the old age pension legislation if we are to sit morning, noon and night and at the same time try to get committee work finished. It just cannot be done, and it is an impractical suggestion to say that it should be done before we prorogue. I agree with the hon. member for Rosetown-Biggar (Mr. Coldwell) that we can no longer consider membership in this house as a sideline. I should like to draw to the attention of hon. members the fact that there are a good many members who have to come from great distances. They cannot get back to their homes to look after their businesses more than once in a session. We must always keep that consideration in our minds. In view

of the fact that some members come long distances and have to remain in Ottawa for a long period of time, it seems to me we have to alter our whole attitude towards the sittings of the house.
I cannot quite agree with the suggestion of the hon. member for Rosetown-Biggar that we might consider holding one session a year and specify the time. May I make the suggestion to the Prime Minister that he consider the possibility of beginning the session late in the fall, having a Christmas adjournment, and then coming back possibly around the middle of January and continuing until we finish? That might be the best way out of the situation. In the unusual circumstances in which we find ourselves today it is not unreasonable for the government to consider trying to catch up with the backlog of legislation and calling a special session so to do.


Mr. Fleming:: Mr. Speaker, would you permit some discussion on the statement of the Prime Minister?


Some hon. Members:: No.


Donald Methuen Fleming: It seems to me there were things said by the hon. member for Rosetown-Biggar and the hon. member for Peace River with respect to the position of members of parliament that should call for reply and correction.


An hon. Member:: You are not the leader yet.


Mr. Speaker:: It is not customary to allow a debate on a statement made at this stage of the proceedings. I have allowed the leader of the opposition and the leaders of the other two groups to speak, but it is not customary to permit other hon. members to do so.


George Alexander Drew: Mr. Speaker, may I suggest that there are reasons why the latitude you have authority to extend should be given in order to permit the discussion of something which in effect changes the whole plan of the business of this house, which introduces an entirely new concept of the extent of the time that members will have to stay in Ottawa, and which generally may change the whole attitude of many prospective candidates for office toward the possibility of having to separate themselves from their families and their other occupations for the best part of a year. This is an announcement that goes far beyond any matter of ordinary procedure, and in view of its importance and its possible effect upon the future membership of this house I earnestly suggest that it would be highly desirable, sir, that you exercise your discretion and permit certain suggestions to
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be put forward for the consideration of the government.


Mr. Speaker:: The difficulty is that I am bound to see that the rules of the house are observed, and there is no motion before the house at the present time. It is probable that an opportunity will be given hon. members to discuss the matters the leader of the opposition has mentioned, which are very important matters; but at the present time that is not permissible. It could only be allowed by unanimous consent.


Some hon. Members:: No.



RAILWAYS, CANALS AND TELEGRAPH LINES CHANGE IN PERSONNEL OF STANDING COMMITTEE

Mr. L. D. Tremblay (Dorchester) moved:: That the name of Mr. MacDougall be substituted for that of Mr. Thomson on the standing committee on railways, canals and telegraph lines.
That the name of Mr. Goode be substituted for that of Mr. Weaver on the standing committee on railways, canals and telegraph lines.


[Stage Direction]
Motion agreed to.


[Stage Direction]
Bill No. 356, respecting Canadian Pacific Railway Company.-Mr. Decore.


Hon. Alphonse Fournier (for the Minister of Agriculture) moved: the first reading of Bill No. 357 (from the Senate), to amend the Criminal Code (race meetings).
Motion agreed to and bill read the first time.



QUESTIONS


Mr. Courtemanche:: 1.	Have any plans been prepared for the construction of the St. Lawrence deep waterway?
2.	If so, are such plans preliminary or final?
3.	By what company were they prepared?
4.	What was the cost of such plans?


Mr. Benidickson:: Plans of the St. Lawrence deep waterway have been prepared concurrently with, and as a natural consequence of, the discussions that have taken place over the years between Canada and the United States in regard to the project. Some of these are preliminary and some may be final. All such plans drawn in Canada are the work of

Questions
government engineers. So far as cost of the plans is concerned, the special projects division of the Department of Transport have different engineering duties to perform and accounting records are not maintained in a way that would show the cost of servicing any one particular project.


EMPLOYEES OF GOVERNMENT AGENCIES TRANSFERRED TO PERMANENT POSITIONS
Mr. Kirk (Aniigonish-Guysborough):: 1.	How many employees of government agencies, crown companies or corporations have, since 1946, been transferred to permanent positions and authorized by the civil service commission to enjoy benefit of the Superannuation Act?
2.	How many have been so transferred from each such agency, company or corporation in each of the years from 1946?
3.	What has this cost the government, giving amount by years, and stating the agency, company or corporation involved?


Mr. Sinclair:: We could answer parts 1 and 2, but in reference to part 3 I have spoken to the hon. member. What he was interested in was the amount of back payments made by the government, not the statutory payments which have been made since the employees in question became permanent. There are no back payments.


Mr. Speaker:: Answered.


PAYMENTS ON FIVE-YEAR POOL
Mr. Fair:: 1.	Has the government given any consideration to compensating the prairie wheat growers for losses suffered as a result of subsidizing the Canadian consumers during the crop years 1945-50?
2.	If so, what may the wheat growers expect to receive, and when?


Louis Stephen St-Laurent: The government gave prolonged and careful consideration to the representations made by the pool organizations of the prairie provinces and others respecting the five-year wheat pool; subsequently, the sum of $65 million was appropriated by parliament as a final settlement for the pool operations, and it is not the intention of the government to make any further recommendation to parliament in that regard.


PRINTING DONE UNDER AUTHORITY OF KING'S PRINTER
Mr. Knowles:: 1.	What was the total amount of printing, by dollar value, done under the authority of the king's printer during each of the years 1948, 1949 and 1950?
2.	How much of this was done at the government printing bureau?
3.	How much was let out to private printing firms?
4.	With respect to the amount let out to private printing firms, how much was done in (a) union shops; (b) non-union shops?


Mr. Bradley:: 1.	Fiscal year 1948-49, $7,000,881.85; 194950, $8,177,268.79; 1950-51, $9,736,686.44.
2.	Fiscal year 1948-49, $3,940,667.11; 194950, $4,362,657.75; 1950-51, $5,495,212.43.
3.	Fiscal year 1948-49, $3,060,214.74; 194950, $3,814,611.04; 1950-5.1, $4,241,474.01.
4.	No information.



QUESTIONS PASSED AS ORDERS FOR RETURNS


DOMINION BUREAU OF STATISTICS


Mr. Black (Cumberland):: 1.	How many requests for returns have been sent out to each province under the Statistics Act in connection with the industry and merchandising division for the year 1950?
2.	How many notices, if any, have gone out to each province stating that legal action will be taken against merchants for failure to make such returns for the year 1950?
3.	In how many cases in each province has legal action been instituted for failure to submit returns for the year 1950?
4.	How many convictions, and for what amounts,
by provinces, have been secured for (a)	1950;
(b) previous years?


Mr. Mcllrailh:: Return tabled.



WHEAT OVERAGES IN TERMINAL ELEVATORS

Mr. Wright:: 1.	What were (a) the overages in weight; (b) the overage in grades, in each crop year from 1945 to 1950 under sections 138 and 138A of the Canada Grain Act, 1930, in terminal elevators?
2.	What companies had these overages, and what was the final disposition made of same?


George James McIlraith: Return tabled.



CERTIFICATES OF CITIZENSHIP


Mr. Balcom:: 1.	How many persons with residence in Nova Scotia have been granted certificates of citizenship for the months of January, February, March and April, 1951?
2.	What are their names, addresses, occupations and country of origin?
3.	Are all applications from persons living in Nova Scotia made through the Halifax office?
4.	If not, through what other avenues?


Mr. Bradley:: Return tabled.



MOTION FOR PAPERS


Mr. Goode:: For a copy of all correspondence exchanged between the government of British Columbia and the federal government, during 1950 and to date in . 1951, regarding the cost of opening a road between Agassiz and Hope, British Columbia.


Mr. Winters:: I have spoken to the hon. member, and I would be glad if he would agree to permit this motion to stand for the time being.


Mr. Speaker:: Stand.



MUNICIPAL GRANTS ACT


Hon. Douglas Abboll (Minister of Finance) moved: that the house go into committee at the next sitting to consider the following resolution:	<
That it is expedient to bring in a measure to provide that the Minister of Finance may, out of moneys provided by parliament, make certain grants to municipalities in respect of federal property situated therein.
He said: His Excellency the Governor General, having been made acquainted with the subject matter of this resolution, recommends it to the consideration of the house.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the orders of the day:
Mr. A. F. Macdonald (Edmonton East):: should like to ask the Minister of Resources and Development whether there have been talks between the city of Edmonton, the province of Alberta and the federal government with respect to the pressing need for new housing construction in the Edmonton area to meet urgent military and civilian requirements; or has the minister received any communication from the provincial government? If so, what is the likelihood of a housing project under section 35 of the National Housing Act proceeding in the city of Edmonton?


Robert Henry Winters: We are aware that the government of Alberta is interested in projects under section 35 of the National Housing Act, and we have informed them that we shall be pleased to consider any specific proposals they may submit.



QUESTIONS AS TO PRIORITIES FOR ESSENTIAL MATERIALS

[Stage Direction]
On the orders of the day:
Mr. W. Ross Thatcher (Moose Jaw):: should like to direct a question to the Minister of Defence Production. In view of reports that housing is being held up in many sections of Canada because of lack of materials, will the minister tell us what recent steps the government has taken to see to it that housing is given adequate priorities to obtain essential building materials?


Right Hon. C. D. Howe (Minister of Defence Production):: Mr. Speaker, I have had no
Inquiries of the Ministry report that housing is being held up. Perhaps my hon. friend has. I assure him that the priority officer of the department gives assistance to low cost housing projects when the need for that assistance is called to his attention.


Wilbert Ross Thatcher: I should like to ask a supplementary question of the Minister of Defence Production. Does his department give specific priorities to housing projects for the purpose of getting building material?


Clarence Decatur Howe: No, Mr. Speaker; there is no specific priority, but certainly there is a working arrangement with my colleague the Minister of Resources and Development for priority assistance in building houses, where that assistance is required.



OTTAWA ORDNANCE DEPOT


[Stage Direction]
On the orders of the day:
Mr. G. K. Fraser (Peterborough West):: should like to ask the Minister of National Defence or his parliamentary assistant to make a statement regarding the fire at the ordnance depot in Ottawa on Saturday night, which caused damage to the extent of over a million dollars. I should like the minister to state also whether he has asked the Minister of Justice for the assistance of the Royal Canadian Mounted Police to investigate not only this fire but also previous fires during the last thirty months which have destroyed or damaged defence properties at a cost to the taxpayers of Canada of over $3 million.


Mr. R. O. Campney (Parliamentary Assistant to the Minister of National Defence):: In the absence of the minister, in answer to the first question asked by the hon. member I may say that the fire which occurred at Plouffe park, Ottawa, at about 10.30 last Saturday evening destroyed one of the ten bays of the building which comprises No. 26 ordnance depot. That bay was filled with paint, oils, cleaning materials and other materials of the kind, all packaged for shipment; consequently it was a very spectacular and stubborn fire. The other nine bays were not damaged, except one adjacent to the one destroyed, where some damage from smoke and water occurred when the roof of the first bay collapsed. Steps are now being taken to ascertain the actual value of the goods destroyed, and a very intensive investigation is being conducted to determine, :f possible, the cause of the fire. In that connection the R.C.M.P. are working with the army.

Inquiries of the Ministry
I shall be pleased to bring to the minister's attention the second question raised by the hon. member.


George Alexander Cruickshank: I should like to address a supplementary question to the parliamentary assistant. In view of this serious fire, will the minister consider altering the plans outlined in the press for the construction of the largest one-storey building in the dominion for ordnance purposes, and having several buildings constructed in various places rather than the one building?


Ralph Osborne Campney: I shall bring the hon. gentleman's question to the attention of the minister.



PENSIONS


[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: I should like to direct a question either to the Prime Minister or to the Minister of National Health and Welfare, arising out of the statement made earlier today by the Prime Minister. In view of the fact that pensions for the blind are included in the present Old Age Pensions Act, will these provisions be carried forward in the new old age pensions legislation, or will there be a separate act for the blind?


Hon. Paul Martin (Minister of National Health and Welfare):: The intention is to have a separate act. Of course until such time as the universal act has been passed, the present legislation which covers the blind will continue in existence.


Stanley Howard Knowles: We can take it, then, that the separate act for the blind will be brought in when the other legislation is presented to parliament?


Mr. Marlin:: The present intention is that when we bring in the provision for assistance to the groups between sixty-five and sixty-nine, we will also bring in the other. The general clauses of the act dealing with the sixty-five-sixty-nine group apply, mutatis mutandis, to the assistance to the blind.



INQUIRY FOR RETURN


[Stage Direction]
On the orders of the day:
Mr. G. F. Higgins (St. John's East):: I should like to direct a question to the Minister of Public Works. On May 14, as reported at page 2978 of Hansard, an order for return was passed in connection with certain repairs to a wharf at Portugal Cove. The minister at that time stated that there would be no
[Mr. Campney.l

objection to the passing of the motion, provided that the consent of the provincial government was obtained. I wonder if that consent has been obtained.


Alphonse Fournier: We have written to the premier of Newfoundland for his consent, but so far we have not received his answer; at any rate it has not yet come to my desk.



CUSTOMS TARIFF

Douglas Charles Abbott: the second reading of Bill No. 295, to amend the Customs Tariff.


Mr. J. M. Macdonnell (Greenwood):: Mr. Speaker, when the resolution preliminary to this bill was before the house and, I think, in his budget speech as well, the minister explained that the tariff items dealt with in the bill were not of a very vital nature and that most of the important tariff discussions had taken place at Torquay and would be reported in due course. I therefore have no intention of dwelling on the discussion which took place at the resolution stage when various details were brought to the attention of the minister's representative. Neither have I any intention of going at length into the Torquay discussions because those are still before the banking and commerce committee and no doubt will be debated when the report of the committee comes back to the house. There are just one or two matters closely related to Torquay that I wish to bring to the attention of the house briefly.
I think it is generally conceded that there was a good deal of disappointment at the results at Torquay, perhaps with the one exception of the results achieved between the United States and ourselves. It was natural that there should be some discussion, as there was, with regard to the question of preferences. After all, what is happening now is that our trade with the United States has been increasing and that with the commonwealth has been decreasing. There was discussion, and there will be further discussion as to the basic question of the direction of our trade. In that connection I wish to read a brief extract from what was said by the leader of the opposition (Mr. Drew) on the debate on Torquay on May 21, because I think it is worthy of being put on the record here in this connection. Speaking on our trade position, and particularly our trade position, with the United States, he said this, as reported at page 3225 of Hansard:
We have every reason to welcome the extension and expansion of trade with the United States . . .
By all means, let us seek the expansion of our trade with the United States; but let us remember

that this country is set up for trading with the United Kingdom and the commonwealth. That was not done with any thought of placing barriers between the United States and Canada. Our ties of blood, our ties of friendship and our ties of history are too close for the effective erection of barriers between the peoples of the United1 States and Canada, who know each other better than the peoples of any other two nations in the whole world.
Then the leader of the opposition went on to point out the rather striking figures of the increased trade with the United States, and to what a large extent this trade depended on the present emergency and the defence program. He also drew special attention to the decreased trade with the United Kingdom and went on to suggest, pursuant to a suggestion made by a conference of businessmen recently, that there should be a conference of the nations of the commonwealth-
... to seek every possible means of extending trade and removing any barriers which still hinder the extension of trade and of contact of every kind within this great fellowship.
That last quotation is from page 3227 of Hansard.
I just wish to make one other point, Mr. Speaker. This question of preferences is of course part of the question of trying to have our trade as far spread as possible. At the present time we are enjoying record trade with the United States, but it is not possible to dismiss from our minds entirely such names as Hawley-Smoot and Fordney-McCumber. We cannot forget the fact that to a certain extent we are competitive with the United States. It was, no doubt, partly with that in mind that the hon. member for Vancouver-Quadra (Mr. Green) pursued the question of preferences which has such special importance to certain producers both on the Pacific and on the Atlantic coasts. In the course of doing so, he got into a discussion with the Minister of Defence Production (Mr. Howe) who is also the Minister of Trade and Commerce, and the minister made one of those remarks of his which enliven, although they do not enlighten, the proceedings of this house. In answer to a complaint by Mr. Green to the following effect, as reported at page 3253 of Hansard:
I am not too sure that this government would not do away with the preferences entirely if they felt they could get away with it as far as the public were concerned,
the Minister of Trade and Commerce said:
Who would stop us? Don't take yourself too seriously. If we wanted to get away with it, who wouldi stop us?


Clarence Decatur Howe: Is my hon. friend quoting from his leader's remarks?


James MacKerras Macdonnell: No, I am
quoting from Hansard; I hope I copied it
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correctly. I will quote them now from Hansard direct.


Clarence Decatur Howe: That was pretty well threshed out at Montreal.


James MacKerras Macdonnell: Just to make sure as to the correctness-I certainly would not wish to misquote the minister; and I think that he will find that I am quoting correctly- reading from page 3253 of Hansard we find the following:


Clarence Decatur Howe: Who would stop us? Don't take yourself too seriously. If we wanted to get away with it who would stop us?
Is that the same as I read before?


Clarence Decatur Howe: That is correct, just as your leader was reported in the press this morning.


James MacKerras Macdonnell: We are both correct. That is the important thing. We try to be accurate when we are quoting the Minister of Trade and Commerce (Mr. Howe) especially.


Clarence Decatur Howe: It is a great political issue. I would thresh it as long as I could, if I were you.


James MacKerras Macdonnell: The things the minister says are interesting and we like to quote them. Of course, there is no need of going at any length over the other ground which the minister and I have traversed. We are accustomed in this house to the fact that the minister does not take us as seriously as we should like to be taken. We are accustomed to the fact that the minister is an authoritarian and we do not expect very much. I think I cleared that word with him previously. It is not an offensive word, I believe. This time I think the minister has gone a little further. Let me read again what the minister said. Let me be sure I am right. This is what he said:
Who would stop us? If we wanted to get away with it who would stop us?
That reply was made in answer to the hon. member for Vancouver-Quadra (Mr. Green) who was saying that the government thought they could get away with it as far as the public was concerned. The only point I wish to make is that it is difficult to discuss these matters, which are of some importance, when we find that the minister makes a retort of that kind, which is not taking the discussion seriously, and which underlines the thing which he seems to be so anxious to say from time to time; not only to say but to repeat and to emphasize, namely, that he thinks this house is not worthy of any great consideration -indeed of very little consideration.
The only thing I want to add to that is that some day, I do not know when, I do not

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say one year, five years, ten years, but some day, the public is going to wake up to the fact that it is interested in this parliament. After all, it is all they have, as the man said about his wife, "a poor thing, but mine own". This parliament is what the public sent down here, and at the present time some of us say that they have selected a rather queer one. But it is a very satisfactory one to the minister. He can have his supporters say "Good old C.D." to everything that he says, and even say "Good old C.D." to this. It may be that at the moment the public will take very little interest in it but I suggest, Mr. Speaker, that it would be better if the minister would take us seriously. This parliament is composed of serious people, and naturally we should be taken seriously. I suggest to the minister that while this is great fun, while it is grand as long as it lasts, some day the people may wake up to the fact that when he is disregarding and making little of this house he is in fact making little of the Canadian people. There is no doubt that that inference has been left because in the little exchange that I have just read the minister has made it perfectly clear that along with the members of parliament he classes the people who elect the members of parliament, and they are to be set at nought.
As I said at the outset, I think the details connected with this measure can be discussed in committee. At the moment I have no need to add anything more.


George Alexander Cruickshank: Mr. Speaker, I shall be very brief in my remarks on preferential tariff because I am anxious to get away to the veterans affairs committee. However, I do want to keep the record straight in connection with some statements made by the parliamentary assistant to the Minister of Finance.
I am sure he made the statement in good faith, because I know he is sincere in his advocacy of a few packing concerns who manufacture margarine as I am sincere in trying to support the interests of the dairy farmers. The parliamentary assistant to the Minister of Finance gave a list of oils that came under preferential tariff, as reported at page 3122 of Hansard of May 17. Actually I am sure it is only a partial list, and I want the hon. member to look it up. I am not disputing the figures that he gave, and I am not disputing that he gave them in all sincerity. But, Mr. Speaker, in order that the record may be clear to the people of Canada, particularly to those whom I am sure the parliamentary assistant is attempting to assist by enabling them to secure a cheap substitute for a pure food such as butter,

may I say that he has not taken into account the fact that these oils are imported free of duty. I repeat, they are imported free of duty. The remarks of the parliamentary assistant did not give us that information. They were imported free of duty, held in storage, and some months later, instead of their being beneficial to the consuming public, as he claims, the price of margarine was increased 10 cents a pound, margarine made out of these oils which were imported free of duty. That was not to the benefit of the consuming public but to the benefit of Canada Packers, and some four or five other concerns.
As I stated, I have no quarrel with the figures he gave, but I hope the parliamentary assistant takes into account this fact. No doubt because of the excessive amount of work that he has to do, he has not been able to assimilate the knowledge which would be beneficial to the consuming public, but I admit it has been to the benefit of the packing concerns. The bulk of the coconut oil now being used in increasing quantities in the manufacture of margarine is processed in Canada from copra or coconut meat, and this product is brought into Canada under a tariff item. I want the parliamentary assistant to know this, because apparently his assistants have not brought it to his attention, probably because they are understaffed or overstaffed in the ivory tower. It comes in duty free under item 113a under both the British preferential tariff and the most-favoured-nation tariff. The figures quoted by the parliamentary assistant, as they appear at page 3122 of Hansard, do not show that.
We had a gentleman in the city of Vancouver, which happens to be the largest city in our province, who made an immense fortune. Incidentally, the city of Vancouver is just across Burrard inlet from the city of Vancouver North from which my good colleague comes. As I said, this gentleman made an immense fortune from importing copra or broken coconut meat which was processed to make margarine to sell at an increase in cost of 10 cents a pound after it had been brought in duty free during the period when butter was short.
The parliamentary assistant did not bring that information to the notice of the people of Canada through the medium of Hansard, although he was very careful to note other things. Peanut oil in substantial quantities is now being used in margarine, and that comes in from British preference countries under tariff item-and again I hope some of the assistants to the parliamentary assistant will look up this item in their spare time. I refer to item 276a (i), free of duty. Mark

Customs Tariff
that, Mr. Speaker. This also applies to tariff item No. 276c, which covers coconut oil, crude, but imported to be refined for edible purposes.
I know that the parliamentary assistant to the Minister of Finance did not want to mislead the public, but these facts were not put on the record. The figures that he quoted on May 17, and which appear in Hansard, are misleading. They do not state that this preference was used to increase the excess profits of Canada Packers and their few associates to the detriment of the consuming public who buy a cheap substitute for an edible food like butter. They do not tell the story at all. If you remember, Mr. Speaker, much ado was made about whether the oils were edible or not edible. For instance, coconut oil, crude, when imported to be refined for edible purposes comes in duty free under these tariff items. I should like the parliamentary assistant to make that point clear. I am not disputing his figures, but I am definitely stating that his figures were at least misleading when he referred to the duty paid.
I should like to point out that importations of duty-free vegetable oils, including coconut oil and peanut oil used in margarine, increased rapidly during the first quarter of 1951. It increased to the point where-and the parliamentary assistant, through the extra staff he has over there, may check me; I do not want them to find themselves at leisure two-thirds of the year-an average of 1,531,000 pounds of margarine per month were imported in that period, as compared with an average of only 875,000 per month during 1950.


James Sinclair: Public demand.


George Alexander Cruickshank: This was, on the average, an increase to the extent of more than 75 per cent. Mr. Speaker, all things come to him who waits: the parliamentary assistant has said, "public demand". That was the very thing I was hoping he would say. Here we have misleading statements issued to the public, that they are going to receive a food- and in this instance I will call it a food- as a substitute for butter, only to find it going to a very high price. "Public demand"-yes, by misleading statements, by bringing in oils duty-free, oils that can be turned in at one end of a machine and come out at the other, as I saw it done at the Canada Packers plant at Toronto. These oils are offered as a substitute for butter, for the production of which the farmer has to work 365 days a year, from twelve to sixteen hours a day. Yes, "public demand", when it is brought about by misleading statements that the consumer will get a cheap substitute. This oil, Mr. Speaker, was brought in and held in storage, duty
free. That was not told to the public. It was held over for this period until there was a short supply of butter and in order that five or six processors such as Canada Packers could profit, at the expense of the consumer. He did not get a cheaper substitute for butter. Canada Packers, duty free, got excess profits of ten cents a pound.
That does not appear in the record of May 17, at page 3122 of Hansard. I am willing to admit I may be prejudiced in the matter. I say I have every right to be prejudiced, on behalf of the Fraser valley milk producers association. Perhaps I am not qualified to give an impartial judgment in the matter, any more than the parliamentary assistant is qualified, with his prejudice in favour of Canada Packers or other manufacturers of margarine.
I am willing to admit I am prejudiced. I inferred from his statement that as a result of this freedom from duty the consumer would get the benefit in the price of the margarine which would compete with butter which was at an admittedly high price. He must have known, or his assistant must have known, that Canada Packers brought in this copra, this coconut meat, to manufacture into oils to be used in making margarine, that they held it from one to five months to sell at a rate ten cents greater than when they brought it in. If that is benefiting the consumer, then I would like to know it.
I am all for these preferential agreements and, in order to forestall what might be said, let me say that, with the Minister of Agriculture (Mr. Gardiner), I am one of the two free traders left-and I know that will be thrown at me.


Mr. MacDougall:: Here is another.


An hon. Member:: And here is another.


George Alexander Cruickshank: If I get a little more support, I will attend to this coconut oil, this poor substitute for butter. I want to tell you this-and I speak with authority from my own riding-that you can bring in margarine or margarine oil by the boatload, the trainload, by submarine or by aeroplane, duty free, if you will allow in duty free, under the same terms, everything that goes toward the manufacture of butter. When I say that I speak as a representative of all western ridings.
I do not care how much coconut oil you bring in duty free, provided everything we use in the production of butter receives the same treatment. I do not wish to delay the passage of the bill because, as I said earlier, I want to attend the sitting of the committee on veterans affairs. I can assure the house that although I disagree with mv
3G76

colleague, in most instances I have every confidence in his judgment. During the time when he served his country overseas we were assigned the same room, and I had the privilege of looking after his constituency. I trust no one will think there is anything personal in the present instance, because of the different views we hold in this connection. He is sincere in his belief, and I am sincere in mine-the only difference being that I know that, in the long run, for the benefit of Canada, he is wrong and I am right.
If the parliamentary assistant is going to speak I shall stay around and, if necessary, miss the meeting of the veterans affairs committee. Perhaps in doing so I shall keep the hon. member for Spadina (Mr. Croll) in his seat, because he and I might disagree in the veterans committee.


An hon. Member:: It sits tomorrow.


George Alexander Cruickshank: I am a day ahead of myself-but I am so anxious to help the veterans that it is possible I may be two days ahead. However, I shall certainly stay around to hear what the parliamentary assistant has to say.
Let me repeat that I have no objection to coconut oil or any other oil being brought into my riding in any quantity or in any form, provided those of us who produce butter and other dairy products in that riding are permitted to bring in under the same terms anything we require in the production of our dairy products.
I admit that if I represented a one hundred per cent consumer riding, particularly if I were speaking about the end of 1953, I might take a different attitude. But I would urge the consuming public to check the statements I have made today and previously concerning these imported oils. I repeat that the public was not given the benefit of these cheap oils in connection with the manufacture of this imitation of butter. But who got the benefit? Canada Packers and one or two associates got it, through holding those cheap, crude oils until such time as there was a scarcity of butter, arising as a result of the operation of the old law of supply and demand. When that shortage brought the price of butter to an admittedly excessive rate, the margarine was released.
The oil was produced and brought in, and the margarine was produced and held in storage at those ridiculously unfair competitive rates, and sold out at a 10 per cent increase. I have no intention of saying more.
I do not believe that the parliamentary assistant, in doing his duty as he saw it in his special capacity, intended to leave the impression that the consuming public of Canada was getting the benefit of these

Customs Tariff
imported oils. In Vancouver raw coconut meats were brought in and processed into coconut oil to manufacture this so-called imitation of butter, presumably for the benefit of the consuming public but actually to make excess profits for a few packing companies.


Mr. Speaker:: Order, if the parliamentary assistant speaks for the minister now he will close the debate.


James Sinclair: I did not move the bill, but it is quite true that when the bill goes into the committee stage I shall be speaking for the minister. I should like to speak as the member for Coast-Capilano as well as the parliamentary assistant, and answer some of the charges my friend has made.


Mr. Speaker:: It makes it very difficult to follow the usual procedure of the house if a parliamentary assistant is piloting the bill through the house for the minister and speaks for the minister and also in his personal capacity as a member. I believe we have established a practice in the house that when the parliamentary assistant is acting for the minister he cannot act in his private capacity also. He may speak on presenting a bill for second reading.


James Sinclair: I have not.


Mr. Speaker:: It is true that the parliamentary assistant did not speak on moving second reading of the bill, but the practice is that if a minister does not speak on introducing a bill he cannot speak until closing the debate. I believe we should abide by our usual practice and allow the parliamentary assistant to speak in reply on closing the debate.


George Alexander Cruickshank: That Is one of the
penalties of fame, Mr. Speaker.


Donald Methuen Fleming: There is one aspect of this matter that I should like to raise briefly. On a previous occasion we were told that the tariff reductions proposed in this bill have no reference whatever to the tariff concessions made at Torquay; the two are entirely independent. We were told the government was proceeding with these reductions without any regard for the agreements at Torquay or the course of the negotiations there.


James Sinclair: Would the hon. member indicate when that statement was made, because I do not recall such a statement?


Donald Methuen Fleming: When we were debating the resolution, the Minister of Finance (Mr. Abbott) intimated, and my friend will find it in Hansard, that the tariff reductions proposed in the present bill have no relation whatever to the Torquay tariff concessions.

At that time it was also intimated, Mr. Speaker, that much of the benefit of these reductions will flow to producers in the United States. My point is this; why were the tariff reductions proposed in the present bill not used in bargaining at Torquay with a view to deriving further concessions, if possible, from the United States? If these were isolated in point of time, that is to say the tariff reductions proposed in the present bill and those proposed in the Torquay agreement which presumably are going into effect by order in council, then there might be some reason for saying that there was no purpose in using them as bargaining factors.
These reductions, however, come forward at the very time when the Torquay negotiations, having been carried through, issue in an agreement which was reported in the house subsequent to the introduction of and the debate upon the resolution which preceded the introduction of this bill. Now, putting those factors together, it seems to me only reasonable business sense that when the government was prepared to recommend the tariff reductions contained in Bill No. 295 it would have been desirable to try to get some balancing advantage for Canadian producers in the markets of the United States.


Mr. J. H. Blackmore (Lethbridge):: Mr. Speaker, I rise in support of the general position taken by the member for Fraser Valley (Mr. Cruickshank). I believe we have made a serious mistake in allowing margarine to replace butter. What the producers of margarine did this spring clearly indicates what those gentlemen would do if there were ever a deficiency of butter, or if they ever got the herds of milk cows completely depleted. They would raise the price of margarine twice as high as butter ever went. These gentlemen who went into the manufacture of margarine did not do so for the benefit of the people, not by any means.
There is another serious aspect to this question, and that is that the dairy cow enriches the farm upon which she lives. She enriches everyone who has anything to do with her. The producer of margarine leaves the country poorer. There is not one single factor entering into the production of margarine that directly or indirectly contributes to the natural wealth of this nation. Let everyone bear that in mind.
I know the reason why a good many of our members were almost bludgeoned into supporting margarine. It was because the price of butter was so high people were groaning for relief. They wanted something cheaper than butter to eat.
The wise procedure for the government at that time would have been to subsidize the
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price of butter in order to bring it down to a point where it could successfully compete with margarine. To try to talk any member of this government into paying subsidies however is just about as useful as trying to talk the mountain off its pedestal. Those gentlemen have not learned the elements of a sound economy. Until they do there is no use talking subsidies to them. Nevertheless, that would have been a sound policy, and instead of having 500,000 fewer cows in Ontario, we would have had 500,000 more. We would have been in a far better position to support ourselves than we are today.
I shall place myself on record as being in support of the position taken by the member for Fraser Valley in that we are not following a wise course in allowing margarine to displace butter in this country.


Mr. F. D. Shaw (Red Deer):: Mr. Speaker, the subject to which I wish to refer has no specific connection with margarine. I wish to refer the parliamentary assistant to a discussion which took place in the house on May 17 when we were in committee considering the customs tariff resolution. At that time I indicated a situation which had developed in at least one of our ports, namely, Sarnia. Certain purchasers of vehicles made in the United States had brought those vehicles into Ontario and paid the duty on them. When it became necessary to leave this province to proceed to Alberta by way of the United States, which is practically necessary under existing conditions, the owners of those vehicles were forced by the Canadian customs officers to post bonds to assure that the vehicles would not be sold in the United States.
Now, the assumption that they would be sold in the United States was fantastic, if not ridiculous. In the case of one vehicle, a hearse, a duty of $1,500 had been paid. It is utterly fantastic to believe that the purchaser, who was an Alberta dealer, would take that vehicle back into the United States and sell it at United States prices. On May 17 the matter was referred to the Minister of National Revenue (Mr. McCann) by the Minister of Finance (Mr. Abbott), because he said it was a matter of administration in the Department of National Revenue. The Minister of National Revenue asserted that there must have been some slip-up either in the information I received or on the part of the customs officers.
I have double-checked the information and I find that not only does this apply to the individual I mentioned, but on that very day -it was a Sunday morning-three other vehicles passed through and exactly the same thing applied to them. What I should like to do is to secure some information that can be

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put on record in order to indicate to these Canadian dealers whether they may or may not drive these American made vehicles, upon which the duty has been paid, back through the United States. It would not have surprised me if the United States customs officials had insisted upon a bond, but they very quickly granted a permit. There was no difficulty whatsoever. The dealer in this particular case and the three individual purchasers were able to proceed through the United States without any difficulty at all. I think this matter should be cleared up because there must be a great many persons in the country who have posted bonds of $5 per vehicle. Actually it is not so much the matter of the $5 as it is the complete nuisance of having to do something which under the law conceivably is not necessary.


Mr. E. D. Fulton (Kamloops):: Mr. Speaker, for a few minutes I wish to speak in support of what the hon. member for Fraser Valley (Mr. Cruickshank) has said this afternoon with particular reference to the practice followed in the months of February, March and April by margarine producers of raising their prices simply because, owing to a shortage of supply, the price of butter had increased. There is quite a large dairy industry in one part of my riding, and I find that the farmers' association has always taken a very reasonable attitude on this question. They have never previously urged me as their member to favour a customs duty on the importation of oils going into margarine until this occasion, when they now say: We think it is time that the public of Canada is placed in possession of all the facts, that it should no longer be represented that margarine is a cheap substitute for butter, one which will be available at a lower price and always at a lower price, and that therefore anyone who suggests that any difficulty be placed in the way of the manufacture of margarine is doing a disservice to the country. They now say: It can be seen quite clearly that these margarine manufacturers are quite prepared, as any other industrial manufacturer, to play the market for whatever it is worth regardless of the best interests and needs of the people of Canada.
I think the situation is now clear that our butter producers are entitled at this time to ask for a reasonable measure of protection and to request their members to ask the government as long as these-I do not know whether "unprincipled" is too strong a word;
I do not want to use over-strong words, but I shall call them callously indifferent practices -as long as these practices are carried on by the manufacturers of margarine, raising their prices when they had no increase in cost, then the government should be asked 
to afford some protection to the dairy industry. The replacement cost of margarine did not go up. The margarine manufacturers did not have to raise the price by reason of an increase in the cost of production.


James Sinclair: Why did butter go up in the same period?


Edmund Davie Fulton: For two reasons which I would have thought the parliamentary assistant would have been aware of. One is the constant increase in the cost of producing butter, which is the thing that affects the farmers.


James Sinclair: Not the manufacturer?


Edmund Davie Fulton: The second was the actual shortage of butter at that period. There was an increase in the cost of production, but it was not the farmer alone who was responsible for the butter price increase. It was the farmer to a very small degree who was responsible. I am not arguing for the big wholesale distributor who increased his price on storage stocks; I am talking about the dairy farmer whose industry has suffered as a result of this competition, competition which has been facilitated on the basis that it will be to the advantage of the people of Canada because they will get a cheap butter substitute. We find that when the margarine manufacturers get in the position they want to be in, and when there is no butter or very small supplies of butter available, then they increase their price although they have had no increase in cost. That is the situation to which I am objecting.
I object to this business for another reason.
I am not a tariff expert, and probably never will be, but it has occurred to me that the substantial changes in tariffs which have been made in late years have all been to the prejudice of the farmer. At the moment I do not want to enter into the controversy of high tariff versus low tariff policy. There is something to be said on both sides. Nevertheless it seems to me that, looking at the changes that have been made recently-the moves toward a low tariff policy-the majority of them have not been at the expense of the manufacturing industry but at the expense of the farmer. The small measure of protection which he has struggled for years to have built up-and I am thinking particularly of the dairy industry and the fruit and vegetable growers in our province- is now being whittled away.
As an example, I think particularly of the case of the apple industry where such measure of tariff protection as they had has been largely reduced over the last three or four years. Now we have the same thing

with respect to butter. I do not see why when we are moving, if that is what we are doing, in the direction of a low tariff policy, the first move should be made at the expense of the farmer, and that is what is happening at the present time.


James Sinclair: Mr. Speaker-


Mr. Deputy Speaker:: I must inform the house that if the parliamentary assistant speaks now he will close the debate.


James Sinclair: I will start by answering the hon. member for Eglinton (Mr. Fleming). He said that he understood that the tariff changes indicated in the bill were made without regard to Torquay. It is quite true that they were quite separate from the Torquay agreement but they were not made without regard to Torquay. Most of these items were used by our delegation at Torquay and they found they could get no concession in return for them. To give an example of the concessions we have made in this bill the extended concession on agricultural implements was raised at Torquay, and the United States representatives replied immediately: But it is the policy of your government to reduce and eliminate the tariff on agricultural implements. Why do you ask us to bargain on that?
Another concession is one which I remember very well. I raised the matter myself three years ago as a private member on behalf of the fishermen on the west coast. There was a tariff item that allowed the free entry of lines and nets if made from vegetable fibre. Most of the lines and nets were either linen or cotton. Along came nylon, and the tuna fishermen were the first to use nylon lines. Under our existing tariff the only way that nylon could be brought in was as lingerie. The fishermen and fishing supply houses very rightly objected to paying the tariff that applied to lingerie on lines which they were going to use for tuna fishing. I raised that matter because I represent a fishing riding.
It was one of the items also used at Torquay but used to no avail. We found we could get no concession out of them because it was generally known that the general policy of our government is to keep cutting down tariffs applicable to the fishing industry for the benefit of the industry. We thereupon removed the tariff here in this bill. It is not quite right to say that the amendments in the bill are made without regard to Torquay. They were items which were used without success at Torquay. Probably the major item so far as detail is concerned is the item in the present
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measure having to do with all these parts of mining machinery j We had admitted mining machinery free. We had admitted integral parts free. We attempted to bargain on unfinished parts. Of course the United States representatives said: Obviously you are going to extend your policy to permit the entry of unfinished, parts, parts which you yourself can get manufactured in the same way that we are now doing.
With respect to what the hon. member for Fraser Valley (Mr. Cruickshank) said, first of all I must say that the figures I put on Hansard were correct. I was asked for the tariff on the oils generally used in margarine. These oils are usually imported in the refined state. As a matter of fact the total volume of imports of refined oils, edible oils, last year was three times the volume of raw oils. It is quite true that raw oils have lower rates. Raw edible oils from the British preferential countries come in free, and from most-favoured nations the duty is 10 per cent. The interesting fact, however, to show the extent of the division between raw and refined oils is that on all our edible oil imparts last year, raw edible oils which come in free from Great Britain and ait a rate of 10 per cent from the United States, and the refined oils which have the tariff that I enumerated at page 3122, the average tariff paid on all our refined oil imports last year was 13-3 per cent. The average tariff paid on all our edible oils was 16 per cent, so the tariff on the oils was very substantial.
I had rather expected that since the hon. member for Fraser Valley raised this question at some length during the resolution stage he would again raise it now, and I felt that perhaps the time had come to deal with this matter at perhaps greater length than would be normal. To begin with, both the hon. member for Fraser Valley and the hon. member for Springfield have made the very flattering charge that I am responsible far margarine in Canada. Of course that is not so. Senator Euler very bravely introduced the question in the Senate for two years, and it was not until the third year that he picked me up as a recruit to introduce a bill in this house. As hon. members may recall, at that time my bill was talked out. That publicity may have helped to get results, but it was the Supreme Court of Canada which ruled that the federal ban on the manufacture and sale of margarine was ultra vires.
The second point raised by both the hon. member for Fraser Valley and his friend from Springfield at every opportunity is that margarine is unfit for human consumption.
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George Alexander Cruickshank: On a point of privilege, Mr. Chairman, if my colleague will refer to my speech today he will not find that statement. I did not say it was inedible. I said I was not arguing the merits or demerits of the product; the exact words are in Hansard. The rules of this house do not permit me to describe the qualifications or qualities of margarine.


James Sinclair: Of course the hon. member has substantiated my point. It may be quite true that in the present debate he has not made that statement in this house, but all hon. members will recall the statements by the hon. gentleman in recent months and years. Speaking as parliamentary assistant to the Minister of Finance, who after all is responsible for the collection of taxes from both industry and individuals in this country, I believe as a measure of fairness to manufacturers who are making a perfectly proper and legal product and paying their ordinary taxes, and also to the consuming public who pay a 10 per cent sales tax on margarine and an average of 13 per cent on import duties on the oils used in its manufacture, I should refute this charge that margarine is not a good food, which is made here in the privilege of the House of Commons. I would like to turn back to the actual margarine debate, during which I put on record the opinion in support of margarine of the British medical association, the Canadian medical association and the Department of National Health and Welfare, which had issued a booklet even before the legalization of margarine in which they said:
So far as is known at present good margarine is a complete nutritional substitute for butter in an ordinary diet.
More than that, another authority came forward that day in the person of the Minister of Agriculture, whom I managed to involve in the debate and who agreed that he had never opposed margarine on the ground that it was not a good food. I would rather take the word of the British medical association, the Canadian medical association and the dietitians of Canada on this matter than the opinions of the hon. member for Fraser Valley and the hon. member for Springfield. The manufacture of margarine in this country is a factory process, of course. It is an extremely hygienic process, as will be agreed by any M.P. who visited a packing firm on the Toronto visit, as I have not. That cannot be said for the manufacture of all butter in this country, as the hon. member knows very well. Very good creamery butter is made, but hon. members who remember the summer of two years ago will also know

that some very bad dairy butter is made in some parts of this country.


George Alexander Cruickshank: The same thing applies to margarine.


James Sinclair: There has never been any similar objection to the standard of quality of margarine. However, I think the best evi-dance is supplied by the Canadian people themselves. The large consumption of margarine about which the hon. member protests is pretty good evidence to me of the quality of the product, and also of the need for the product. I believe that is indicative of Canadian acceptance.
Let us turn now and look at Fraser Valley, because most of us know that the interests of the hon. member for Fraser Valley are pretty well confined by the boundaries of that riding. I recall a debate some three or four years ago on the question of whether seiners or gill netters should be allowed to operate in a certain area of British Columbia waters, during which the hon. member made that very clear. He said that he had no seiners in his riding but that he had two gill netters.


George Alexander Cruickshank: The hon. member cannot put words in my mouth. I never said I had two gill netters. Unlike the parliamentary assistant, who is using his position-


Some hon. Members:: Now, now.


George Alexander Cruickshank: If the hon. member for Halifax wants to make a speech in favour of the farmers, which I doubt, he is perfectly entitled to do so. The parliamentary assistant said I had said there were two gill netters in my riding. There are as many gill netters in my constituency, I think, as there are in his riding, but the pulp mills are not in my riding.


James Sinclair: We are getting pretty far from the subject, I think. At any rate the inference was that whatever he had in his riding, he was for. He has made that abundantly clear since he has been in this house, as hon. members know. Well, I wanted to know whether the feeling in regard to margarine is shared by the people of Fraser Valley; and I go about these things in fairly objective fashion. I have a pretty good knowledge of my hon. friend's riding, since he is careful to invite me there during every campaign to help him get elected, despite the fact that I have championed margarine. I got in touch with the firm he continually denounces in this house and asked about their sales in the Fraser valley. Was this one dry spot, a dead end in which no margarine was consumed at all? I was somewhat surprised to get the reply that sales of

margarine in the Fraser valley were quite normal, that they exceeded sales in west Vancouver, my own riding, for example. I suggest that the hon. member need only leave his farm, the ivory tower in which he lives, and walk down to the little store in Clayburn and ask whether margarine is sold there. Or go to Abbotsford or Mission or to the dairy town of Chilliwack, and see whether or not they sell margarine. .Then he will know whether when he speaks in this way he speaks on behalf of all those people. The reason, of course, is that not all his constituents are dairy farmers. While he has many dairy farmers he also has a great many berry farmers and transportation workers, since he has the C.P.R., the C.N.R , the Great Northern and the British Columbia Electric. He also has a great number of sawmill workers, loggers-


George Alexander Cruickshank: Brick workers.


James Sinclair: Yes, and a great number of old age pensioners and burnt-out veterans whom he defends so well in this house and who are very grateful for the opportunity to buy this lower priced substitute for butter.


George Alexander Cruickshank: At an increase of ten cents a pound.


James Sinclair: I am being helped by the
hon. member, though I restrained myself from interrupting while he was talking. This increase was to match the increase in the price of butter. The hon. member apparently thought it was unfair for the law of supply and demand, which affected the price of butter, to also affect the price of margarine, though the manufacturer of margarine had the same increase in the cost of labour as did the farmer. In the case of the manufacturer this increase is supposed to be a heinous thing. Suppose we look at the dairy farmers themselves, and this is a very interesting thing about the Fraser valley. I have done a little research there. In Canada as a whole for every pound of butterfat sold in the fluid market two and a half pounds are sold for processing. In the Fraser valley that position is completely reversed. Two pounds are sold in the fluid market for every pound sold for processing; and the great bulk of the butterfat processed there does not go into butter but into condensed milk. I have the figures here for the first four months of this year. The fluid market took 2,700,000 pounds; for evaporated milk, 847,000 pounds; for butter, 390,000 pounds, or less than 10 per cent. Actually in British Columbia today we do not manufacture even 10 per cent of our butter needs. Most of the dairy farmers even in my hon. friend's 80709-234J
Customs Tariff
riding sell to the fluid market, or for processing into evaporated milk.


Paul Joseph James Martin: And some of them buy
margarine.


James Sinclair: That is the next point I was coming to. I was particularly reminded of it when I was in Denmark a year ago on this military relief debt collection. At a dinner given by the minister to Denmark I sat next to a Danish cabinet minister. I had been driving around all afternoon seeing the lovely farms, and I was talking to the minister about butter and bacon, and we finally got around to margarine. He was surprised to find that we had had a ban on margarine in Canada. He said: Of course in Denmark even our dairy farmers eat margarine for two reasons. I thought I knew the first reason why any dairy farmer, especially a Scotch dairy farmer with a name like Sinclair or Cruickshank, would be eating margarine, and he agreed. The farmers took their butter to market, sold it at a high price and bought margarine at a lower price. But the second reason he gave was a most interesting one. He said: We Danes are a neat, clean, tidy, orderly people. If you saw their farms, you would certainly agree with that statement. I said, yes. He said: You know, some of our Danish dairy farmers always associate the taste of butter with the smell of the cow barn.


George Alexander Cruickshank: Will the hon. member
permit a question?


James Sinclair: If it is pertinent.


George Alexander Cruickshank: Is it true that Denmark has the greatest percentage of defective eyesight among the children of any country in the world?


James Sinclair: Knowing nothing more than
the hon. member's negative assertion, I would say that it is completely wrong. In any case, I want to close these remarks by reading some really good evidence of whether or not margarine is a palatable substitute for butter. We have had medical evidence that it is the nutritional equivalent. I have heard of this Toronto trip and of how members of parliament saw one of the larger packing plants in operation. They gave them a luncheon, and at that luncheon, I understand, margarine was served to certain members; and to confirm that, since the hon. member was attacking this company at every opportunity in the House of Commons, alleging that I was prejudiced in their favour, I wrote to them and on May 31 received this letter from the secretary of Canada Packers:
I have inquired into the Cruickshank affair and I find that he was served margarine at a luncheon

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given in our dining room. I believe he was under the impression that he was eating butter, but such was not the case.


George Alexander Cruickshank: On a question of
privilege, Mr. Speaker, I want to say this, and I think I have the hon. member for Spadina (Mr. Croll) with me. There are certain privileged affairs, and I will bring as my witness the vice-president of the B. A. Oil Company, Mr. Godsoe, to confirm that I will go along with a gag. I will take anything at all, and I will pass it out too. I do not know whether the hon. member for Huron North (Mr. Cardiff) and other Ontario members there did it as a gag. But this is appearing in Hansard and is going among the dairy farmers, and I do not think that even the hon. member for Coast-Capilano (Mr. Sinclair) wants to create a false impression. I was not served margarine; but as a gag a sign was brought in and placed at my seat at the table, owing to the fact that Canada Packers, in my opinion, showed poor taste, headed "serves farm members margarine." It was pointed out that it was set at my place after the dinner started. I say it is poor taste on the hon. member's part. I would not make this correction except for the fact that this is going out among the dairy farmers. It is said that this sign had been put at my seat at the table and that I did not know the difference. The members who sat around me know that I refrained from eating the margarine. I have a bet, any time that my junior colleague wants to take me up, that I know the difference between margarine and butter; but I want to tell you, Mr. Speaker, and through you the hon. member for Coast-Capilano, that when I am a guest at any function, I will go along with a gag, and I will not take advantage of any gag that is played. I think the hon. member for Spadina (Mr. Croll) will bear me out that I am correct in that statement, and I was a guest of the Toronto board of trade.


Mr. Croll:: Speaking to the question of
privilege, along with some of the other members I had something to do with bringing the hon. member for Fraser Valley (Mr. Cruickshank) down to Toronto. It would appear to me that in writing this letter the company showed ill taste and bad manners. I think it was bad manners on the part of the company to discuss one of their guests privately. It is unforgivable to do it publicly.


James Sinclair: I may have made an error
of judgment myself in this. I should not like it to be thought that the company had. I made the inquiry but the secretary did not know I would use the information in the
[Mr. Sinclair.!
house. If it is distasteful to the hon. member, I withdraw my remark.
I hope however that this will put this debate on its proper footing. I must say the hon. member for Kamloops (Mr. Fulton) did try to argue whether or not admitting margarine as a reasonable substitute for butter had such an effect on the dairy industry as to seriously cripple it. That is the serious argument which should be advanced in this house on that matter. I would point out of course that margarine is the only major foodstuff which is subject to a sales tax of 10 per cent. Also, as I pointed out, the edible oils produced, both raw and refined, have an average tax of 13 per cent in point of duty. That is a substantial protection, I would think, for the dairy industry.
When he said that most of these changes in the tariff seem to be against the farmer,
I do not think the record quite bears out that statement. Over the years we have consistently removed the tariffs from agricultural implements at the request of farm members generally, and recently at his request and the request of the hon. member for Calgary East (Mr. Harkness). They raised the question of the duty on portable sprinkling systems, for example, which we are now removing. As to the apple industry, and what they suffered last year, our exports to the United States were ten times our imports from the United States so the tariffs there cannot be said to be unduly severe in effect on the Canadian farmer. The general question of tariffs, of course, is a large one.


Edmund Davie Fulton: They took the market away from our potatoes.


James Sinclair: The hon. member mentions potatoes. The great value of our exports to the United States is in seed potatoes. We *cannot allow our large and profitable business in seed potatoes to be jeopardized by adjustments of other tariffs on potatoes generally. I think that situation itself has been up before the Canadian Federation of Agriculture on several occasions, and I think they are fairly content to have both arrangements working together-the concessions on seed potatoes to the United States, and the fact that Americans can send potatoes into this country. However, that is a fairly broad field and perhaps it could be dealt with better on the agriculture estimates rather than here.


Major James William Coldwell: May I ask the parliamentary assistant if he can give the ratio of edible oils imported to those produced in Canada? I refer to those which go into margarine. Is there an increase in domestic production?


Mr. Deputy Speaker:: Is it the pleasure of the house to adopt the motion?


Some hon. Members:: Carried.


James Sinclair: I will answer in committee.


Mr. Deputy Speaker:: I think questions should be asked in committee.


Mr. Tustin:: I wanted to ask one question.


Mr. Deputy Speaker:: The debate is now closed.


James Sinclair: We are going into committee right now.


Frederick Davis Shaw: Mr. Speaker, may I just ask one question of the parliamentary assistant?


Alphonse Fournier: Do it in committee.


Mr. Deputy Speaker:: Order. I think it would be much better if we were to carry the motion, go into committee, and then have questions asked.


Frederick Davis Shaw: The only difficulty is that I greatly doubt whether there is a place there where this matter can be dealt with.


Alphonse Fournier: The rules should be observed.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Dion in the chair.
On section 1

Schedule A amended.
George James Tustin: I just wanted to ask the parliamentary assistant one question. He referred to the increase in the price of margarine and rather brushed it off by saying that butter went up considerably and that margarine also went up because of the supply and demand. A few weeks ago butter went up about twenty cents a pound. It was followed right along by margarine to the extent of ten or twelve cents a pound. The question I want to ask the parliamentary assistant is this. Butter has gone back down again by about twenty cents a pound. Has he any information to give the committee as to why the full increase in margarine has still been maintained?


James Sinclair: Knowing nothing at all about the cost of the manufacture of margarine, I would suggest it is probably along the line indicated by the hon. member for Kamloops, namely increased costs; because certainly wages and material costs have steadily gone up. If that gap is closed, then the argument of those in the dairy industry that butter should now be in a better competitive position would have some force, because it was the width of the gap which made margarine so attractive, especially to those of low incomes.


Edmund Davie Fulton: On a question of privilege, I am quite sure the parliamentary assistant did not intend to indicate, although his words, if they
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stand in their present form, would leave that impression, that I had said the price of margarine went up owing to an increase in manufacturing costs.


James Sinclair: No, I said butter.


Edmund Davie Fulton: That applied to the manufacturing price of butter. I said that in my view there was no increase in the cost of manufacturing margarine that justified the increase that took place recently.


George Alexander Cruickshank: I would like to say a word in this connection. I am not going to answer the parliamentary assistant in detail. I also could make some remarks about attending a banquet as a guest, but I am not sure whether it would have any effect on oils or not. I do not intend to go into that. I think that point was made perfectly clear by the hon. member from Spadina, so we may consider that a closed issue, which I think might be advantageous to all concerned.
Mention has been made of the fact that margarine has been sold in my riding. I enjoy these interjections, Mr. Chairman, from some of the smaller railway divisions such as Kenora. I happen to have two divisions within my riding, the Canadian National and the Canadian Pacific.


William Moore Benidickson: I have six.


George Alexander Cruickshank: Quite true, you have six railway divisions, and that is all you have in your riding.


Paul Joseph James Martin: A very good member.


George Alexander Cruickshank: I did not say that they did not have a good member. They have an excellent member. As a matter of fact I will compare him with the hon. member for Essex East who always tries to emulate the example set by the hon. member for Fraser Valley and to get the utmost for his riding.
Mention has been made of the fact that I concentrated a bit on my own riding. You know, when I was elected first in 1940 it was primarily to get the most I could for the dairy farmers and others within my riding; second, to work to the best of my ability on behalf of the province in which I reside and the surrounding ridings; and third, to work on behalf of the economy of Canada as a whole. For three or four years, particularly on Tuesdays and Fridays, I have endeavoured to do that, with very little support from some other areas.
It has been mentioned that margarine was sold in my riding, and I frankly admit it. It has been sold in my own little village of Clayburn; it has been sold in all parts of the riding, because unlike Coast-Capilano, where they depend to a great extent on the pulp mills

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and a few fishermen, we have loggers in the riding, the largest brick plant in western Canada and many other small industries. Certainly, margarine has been sold. As a matter of fact, Mr. Chairman, I am sorry to say that farmers in my own district have bought margarine, I think to their own detriment. Certainly they have bought it. That is not the point, as I see it, and the point that has been overlooked by the parliamentary assistant in his exuberance to record on Hansard something about the hon. member for Fraser Valley who very seldom secures any publicity. He has overlooked and failed to answer the important point which was repeated by the hon. member for Kamloops, I believe, namely, that most of these oils that went into the manufacture of margarine had been imported duty free.
The parliamentary assistant made some reference to the fact that I had disputed his figures. I never disputed the accuracy of the figures as quoted by the parliamentary assistant. I think they are accurate. What I did say was that these oils came in duty free and were refined in Canada to go into the manufacture of margarine, and that immediately the price of butter went up the price of margarine went up by about 10 cents a pound, I believe, in spite of the fact that the oils used in the manufacture were to a large extent brought in duty free. I repeat, they were brought in at that time, held in storage, and then the margarine was manufactured. What the parliamentary assistant did not say was that when the price of butter went up- I believe it was in November-to the exceptionally high figure, two or three packing companies held the butter in storage and put the price up in the same way as they put up the price of margarine. The farmer did not benefit one cent from that increase. Make no mistake about that. I hope the people of Canada know that. That exceedingly high price of butter was of no benefit, but rather a detriment to the dairy farmer.
The dairy farmers in my own riding produce very little butter on the farms. We buy our butter. In other words we are consumers as well as producers. We produce milk for sale as butterfat, and we buy butter for our own consumption. We in the Fraser valley paid 81 cents a pound, or whatever the price was, for butter. And any farmer who was not in the fortunate position to be able to pay 80 cents or 81 cents a pound for butter bought margarine, and he paid this extra 10 cents a pound to this delightful colossus of Toronto, Canada Packers, over what they had produced margarine for. They themselves put the price of butter up because they and a few of their competitors were the only people who had
'Mr. Cruickshank.]
butter in storage, and they and a few of their competitors were the only people producing margarine.
I want to make it very clear that the consumers did not get the benefit, and the farmers who produced the milk for sale as butterfat did not get the benefit of the high price of butter. The dairy farmer as a producer bought butter in exactly the same way as the sawmill worker or the brick workers or anybody else, in most instances, at least so far as British Columbia is concerned.
The point I am particularly interested in is the importation of these oils in their raw state. It has been suggested, again I am sorry to say, by one member from my own province- I do not think he will make the statement in the province of British Columbia, even in a consumer district with the slightest hope of being re-elected-that this oil should be permitted in here to be refined. I well remember, Mr. Chairman-and it is exactly the same with butter as it is with fisheries-that two years ago I was lobbied in this house by a representative asking that we do not permit the fishermen in my riding, in Coast-Capilano, in Westminster and in two adjacent ridings, who produce fish, the primary producer, to send them eighteen miles to Bellingham where the fishermen would get from 5 cents to 14 cents a pound more, the argument being the same as that being used by these proponents of margarine, that if the fish were kept to the detriment of the primary producers, the fishermen in Canada, and manufactured into canned fish, or whatever goes with the byproducts within Canada, it would be to the ultimate good of the fishermen and the people of Canada. I was lobbied to that extent. When I am accused of primarily-perhaps wrongly-fighting for the interests of my riding, I have nothing to be ashamed of. I am not protecting the interests of the great giants in the canning industry or the fishing industry who want their extra bit of profit, rather than let the fisherman sell his produce eighteen miles away in Bellingham.
I do not know what can be done about it; perhaps nothing. I make no excuse for my stand, or for any farmer in my riding who, to his own detriment in the long run, buys margarine. I say that so long as protection is to be afforded to any line of industry the farmer should get his fair share of it. I say it is unfair competition to have oil shipped in here from a source of supply where labour and other conditions are as they have been described by the hon. member for Danforth, who has visited the area in question. I say these coconut meats and other oils should not be permitted to come in here duty free so that they compete with the product of the

farmer who must work long hours every day of the year. To my mind that is unfair competition.
So long as we operate under the present system of tariffs, then I say that the dairy farmer is entitled to his share of protection, and should not be put out of action, not only to his own disadvantage but that of the whole country.


Mr. McLure:: What is the cost of producing a pound of margarine for the market as compared with the cost of producing a pound of butter? It would be a fine thing to know what it costs to produce a pound of margarine.


James Sinclair: I have not the least idea of either of those costs. I know the tariff on the inedible oils coming within the scope of the bill, but I have no knowledge of the cost of production of either margarine or butter. There are other departments from which the hon. member could get that information.


Winfield Chester Scott McLure: Does not the parliamentary assistant think that when these tariffs are being prepared inquiries should be made of the manufacturers as to how much of each of the oils goes into a pound of margarine?


Major James William Coldwell: Has the parliamentary
assistant the ratio of domestically-produced oils as compared with imported oils? Has the production of edible oils increased in Canada as a result of the manufacture of margarine?


James Sinclair: I have not that information here at this time. I have only the information respecting customs tariffs on oils coming into the country. I believe the hon. member should have his questions answered by the bureau of statistics.


Major James William Coldwell: I suppose the increased
importation is due to the manufacture of margarine?


James Sinclair: Mind you, edible oils are not only used for margarine; there are other uses, such as that connected with shortening and for packing fish which was mentioned by the hon. member for Charlotte. There are many other uses with which the Department of Agriculture will be familiar.


Major James William Coldwell: I shall ask them.


Edmund Davie Fulton: A few moments ago the parliamentary assistant mentioned rates of 13-3 per cent and 16 per cent on different types of oils. What would be the equivalent rate in cents per pound.


James Sinclair: That can be provided, because we know the total duty and the total amount imported. I can find that out, and give the hon. member the information.


Mr. Gibson:: About four cents a pound.
Customs Tariff


Frederick Davis Shaw: Now that the parliamentary assistant has one of his officials before him and the Minister of National Revenue behind him can he give an answer concerning the bonds which it is insisted the owners of American vehicles must post before crossing back into the United States?


James Sinclair: That is really a matter of administration in the Department of National Revenue. I shall have an official from that department before me in a moment. It is not a matter of tariff policy.


Frederick Davis Shaw: I would not press it if it did not affect a good many people. A number of additional cases have been brought to my attention.


George Alexander Cruickshank: I do not expect the
parliamentary assistant to be able to answer right away but, for the record, I should like to know how much coconut oil has been brought into Canada duty free under tariff item 113a, how much peanut oil has been brought into Canada under tariff item 276d(l), free of duty, and also under 276c(l), which covers coconut oil.


James Sinclair: Did the hon. member refer to 113a?


George Alexander Cruickshank: Yes, that is copra, the raw product.


James Sinclair: I have the figures for the various oils, both raw and refined, but I have not the exact information the hon. member wants. Last year of copra, not prepared, there were 48,325,430 pounds to a value of $4,815,415.


George Alexander Cruickshank: May I have the same
information on peanut oil, under tariff item 276d(l)?


James Sinclair: Edible peanut oil to an extent of 2,877 hundredweight was brought in in
1950.


George Alexander Cruickshank: Is that free of duty?


James Sinclair: Edible peanut oil pays 15 per cent.


George Alexander Cruickshank: Mr. Chairman, what I want to get is the amount of peanut oil that entered under tariff item 276d(l), peanut oil, crude, when imported to be refined for edible purposes.


James Sinclair: The peanut oil brought into Canada in the raw state from British preferential countries amounted to 77,631 hundredweight.


George Alexander Cruickshank: Could I have the same information for tariff item 276c(l), covering coconut oil?

Customs Tariff


James Sinclair: The non-edible coconut oil brought in for paints and other purposes like that amounted in value to $3,411,247.


George Alexander Cruickshank: Mr. Chairman, possibly I have not made my question clear. The information I want is under tariff item 276c(l), coconut oil, crude, when imported to be refined for edible purposes; that is quite a different thing from paint. In other words, it is to be refined to put into margarine.


James Sinclair: Mr. Chairman, I do not believe the object here is to search out details on general trade and tariffs which are in public documents. It is rather to give general information on the items covered in the tariff schedule before us. These items mentioned by the hon. member are not in the tariff schedule being considered. The only items which are covered are oils, hydrogenated, blown, dehydrated or sulphonated and other oils in tariff item 277. I would suggest, Mr. Chairman, rather than have me look through the trade statistics of Canada to find the individual items in the general tariff, the questioning now should be strictly in accordance with the actual items in tariff schedule A.


George Alexander Cruickshank: Mr. Chairman, I have obtained two of the figures, and it is quite all right with me. What I am trying to arrive at, and I am quite in order, is information upon which to base my argument that these oils should not be permitted duty-free entry into this country. The two figures which the parliamentary assistant has given have verified the very argument I am trying to advance. Unfortunately, I did not have an opportunity of advancing this argument prior to the introduction of the budget or I am sure I would have convinced his officials to follow the course of action I am suggesting.
How am I to find these items when apparently the parliamentary assistant, with all his staff, cannot find them? How are the farmers of Canada to know how much crude oil is brought into this country? Forget the paints, because the paint companies will look after that. I want to know how much crude oil is brought in, duty free, to be refined for the manufacture of margarine. If the parliamentary assistant has not got that information I suggest, Mr. Chairman, through you that he has dozens of officials there who can find an excuse for not putting on a duty to protect the dairymen, so they can find out how many pounds or tons of this oil have been brought in duty free, to be refined in Canada.


James Sinclair: I repeat my point of order,
Mr. Chairman. We have had the general budget debate and we have had a general debate on the resolution concerning customs
TMr. Cruickshank.]
tariff; we have had second reading of the bill, and now at last we are down to considering the individual items. The only item in this schedule concerning oils is item No. 277, which covers inedible oils processed in various ways. I try to come here prepared with the facts and figures concerning the items in this schedule. I regret that I am not able, nor are my officials, to quickly dig out these items from the trade of Canada. I also regret that other members of parliament should have their time wasted while we are searching through for these various items outside the bill.


Joseph-Alfred Dion: This is an amending bill to amend the Customs Tariff, and on an amending bill questions must relate to particular items mentioned in the bill. I would, therefore, request hon. members to ask questions relating to the particular clauses or items mentioned in the bill.


George Alexander Cruickshank: Mr. Chairman, I withdraw the last question as it is quite apparent that neither the parliamentary assistant nor his officials know the answer.


Mr. Stanfield:: Mr. Chairman, there has
been some discussion concerning these edible oils. I believe the parliamentary assistant should put on Hansard just what the duty is, general tariff, most favoured nation and British preferential, on these edible oils.


James Sinclair: I did that on the budget resolutions. I gave the tariff on refined edible oils. The hon. member for Fraser Valley asked me to repeat it this afternoon, and also to put on the tariff concerning raw edible oils.


Alphonse Fournier: The parliamentary assistant has given that information three times.


Frank Thomas Stanfield: This afternoon the parliamentary assistant said that peanut oil and coconut oil were admitted free.


James Sinclair: The raw oils are admitted free, peanut oil, cottonseed and so on, from British preferential countries. There is a ten per cent duty imposed from most-favourednation countries. On the refined oils there are varying rates of duty that have been put on Hansard.


Mr. Jones:: I should like to place on the record the point of view of the farmers in my riding. We have a large co-operative, composed of 1,250 members, that is producing butter. They are quite worried about the state of the market today, and they naturally want to bring stability to that market. They passed a resolution unanimously which I should like-


Alphonse Fournier: Would the hon.
member tell me under what item this would come?


Owen Lewis Jones: The same item as these essential oils, item 277.


James Sinclair: Those oils are inedible oils used in the manufacture of paint, tanning, the textile industry and so on, as explained by the minister.


Joseph-Alfred Dion: Item No. 277 does not cover edible oils.


Owen Lewis Jones: I shall be very brief, and in view of the discussion-


Alphonse Fournier: We have been brief all afternoon. If there is no item covering edible oils I am going to object to the continuance of this debate. We should stick to the items in the schedule.


Joseph-Alfred Dion: The point of order is well taken.


Frederick Davis Shaw: I wonder if the parliamentary assistant is in a position now to give me the information I requested earlier.


James Sinclair: I am informed-of course it is not my department-that this provision does not apply to the ordinary tourist's car. This refers to commercial vehicles in transit. The point is to ensure that there is going to be no alteration, improvement or adaptation while the vehicle is in transit, and that the same vehicle as left the country at Sarnia is going to re-enter the country in Alberta or British Columbia. The purpose of the bond is to make sure that is going to happen.


Frederick Davis Shaw: The thought that interests me most is why you should require a greater assurance in that case than you require from me if I proceed to drive through the United States. 1 now have to declare every accessory on that car, and that is checked when I leave the United States.
The second point is that the individual in question is a dealer in buses and hearses who has brought in many vehicles and the last month was the first time he has been faced with this situation. He made approximately ten trips through prior to that and the question never came up. But all of a sudden, and even on a Sunday morning, he was faced with this situation. If there is a regulation which states clearly and specifically that on such vehicles in all cases, whether it involves a dealer, owner or agent, a bond must be posted, I have no complaint so far as the treatment he received is concerned, but even he has not been subjected to the same treatment at all times. This was the first time it had occurred. Since he proposes moving other vehicles through both from east to west 80709-235
Customs Tariff
and west to east he would like to know exactly what he can expect when he arrives at a customs office.


James Sinclair: All I can tell the hon. member is that the officials of the department will certainly look into the case and give him an answer.


Frederick Davis Shaw: That is all I am asking for, that they should look into it and give a specific and definite answer which can be looked upon as a rule, and that this dealer can be so advised.


Donald Methuen Fleming: Would the parliamentary
assistant tell us for our information what was the total duty collected in the last fiscal year on the items enumerated in the schedule to the bill and the estimated loss of revenue in consequence of the tariff reductions proposed in the bill?


James Sinclair: This matter has come up in the house before, and also has been raised before the banking and commerce committee in its attempt to assess the value of the Torquay agreement. It is physically impossible to determine these actual values. To use the example that I used on the resolution stage, there is the fact that we are now going to exempt from tariff rough parts for mining machinery. They had been brought in before under any one of three or four different tariff items depending on whether they were forgings, castings, and so on. Unless we go back into every customs item and pick out these things all the way through, we have no estimate at all of the amount involved.
The same thing is true of the fishing item with reference to synthetic fibres such as nylon now being used instead of cotton and linen. Unless we went back through all the nylon and rayon importations and took out those which were specified as being lines- and we had no category for them-we could not do it. The amount of work in order to get very little information is not commensurate at all with the cost involved. The same answer was pretty well given by the chairman of the tariff board at the meeting of the banking and commerce committee on the Torquay agreement.


Donald Methuen Fleming: I can appreciate that in part what the chairman of the tariff board said before the banking and commerce committee last week may have application here. I can also recognize that it may be difficult to estimate the exact loss in customs revenue in consequence of the reductions because one does not always know in advance what effect the reduction is going to have on the volume of imports. However, I preface my question by asking the parliamentary assistant what

Customs Tariff
was the value of the imports of these commodities last year and the duty collected on them. I think that information should be available. When similar information was asked of the chairman of the tariff board in the banking and commerce committee last week, he was able to give that information with respect to the items under the Torquay agreement. I refer to the volume in dollars of the imports affected- by the Torquay agreement.


James Sinclair: It is quite true that with respect to major commodities, such as Douglas fir plywood and canned salmon which were discussed in the banking and commerce committee, it can be done, but if you look at these items in the schedule you will see that most of them are for little things. The items numbering from 400 on are for the most part little parts of mining machinery, and they have never been separated from their present categories. The same thing is true of synthetic fishing lines which did not come in as fishing goods but came in under other items as general importations of synthetic fibres. It is just as difficult to go through all the records and pick them out as to pick the amount of them out. There are no really major items here other than the reclassification of the plastics under 238. I think all that the chairman of the tariff board tried to do was to deal with a few major items. With a great number of very small items it is practically impossible.


Donald Methuen Fleming: Certainly I will not pursue the matter further if the parliamentary assistant indicates to the house that no estimate of the loss of revenue was made when the bill was drawn and the schedule prepared. I note that the Minister of Finance in the budget speech on April 10, as found at page 1814 of Hansard, estimated the revenue from customs duties in the present fiscal year at exactly the same amount as last year, $315 million. Apparently he did not contemplate any loss of revenue. I wondered if that estimate was based on the pre-Torquay or post-Torquay and post-Bill No. 295 situation.


James Sinclair: It was certainly pre-Torquay but it was not pre the bill because the bill is part of the budget discussion and the basis of the budget figures.


[Stage Direction]
Section agreed to.
Sections 2 and 3 agreed to.
Schedule A agreed to.
Schedule B agreed to.
Title agreed to.
Bill reported.
Mr. Deputy Speaker:: When shall the said
bill be read a third time?


Douglas Charles Abbott: Now, by leave.


John Horne Blackmore: Next sitting of the house.


Mr. Deputy Speaker:: Next sitting of the
house.



EXCISE TAX ACT

Douglas Charles Abbott: the second reading of Bill No. 294, to amend the Excise Tax Act.


James Sinclair: Mr. Speaker, on a motion to go into supply on May 23, the hon. member for Eglinton (Mr. Fleming) raised the question of the statement made by me on the budget in 1949 with regard to the excise tax on watches. I promised at that time I would make a statement when we came to the second reading of the excise tax bill. Hon. members will recall that in the spring budget of 1949 the Minister of Finance (Mr. Abbott) in his budget speech said we were going to remove the 25 per cent retail tax on watches and jewelry and replace it by a 10 per cent excise tax on the manufacturers' level, and that the loss of revenue would be about $8 million.
The 25 per cent tax had been imposed during the war for two reasons, first as a revenue tax, and second to discourage the sale of these items during the war. That was followed by a resolution in the house which read in part as follows:
Resolved' that it is expedient to introduce a measure to amend the Excise Tax Act and to provide, effective on and' after March 23, 1949: . . .
2. That the retail purchase tax be repealed and replaced by an excise tax of 10 per cent, payable by the manufacturer or importer, on all articles now subject to the retail purchase tax.
Watches for personal use, other than watches for the blind and watches for railwaymen, had been subject to this 25 per cent tax. Therefore the question then came up of putting the tax back on the manufacturers' level. A problem immediately arose because of a practice by ten companies in Canada of importing not watches but watch works, watch cases and the actual final display cases separately. They said they were not importing watches, and I think most of us would agree. They then put the case and the works together, put it in the display case and sold it to the retailer, and , their allegation was that this was not the manufacture of a watch.
Well, to get away from all the legal technicalities, I think most hon. members would agree that no watch came into the country, if the case and the works and the

display case came separately. Hon. members would also agree that certainly a watch was delivered to the retailer by the people who brought in the parts; and the act of putting the watch together, if not manufacture undoubtedly was the production of a watch. With that in mind the Department of National Revenue, to carry out the terms of the budget resolution, sent a circular to the collectors of customs and excise, dated April 19, in the following terms:
The honourable the Minister of National Revenue has been pleased to establish the following regulations under authority of section 99, subsection 1, of the Excise Tax Act:
Regulations
On and after May 2,	1949, any person who
assembles clock or watch movements into cases therefor, and who adds any attachment, of metal, leather, plastic or any other material or combination thereof to a new watch, will be regarded as the manufacturer or producer of the clock or watch, as the case may be.
In other words the intent was in that order. Of course the fault in the order was that the resolution still had not been translated into an act and there was no authority to issue regulations, so these regulations could be more or less classed as a directive to the collectors of customs and to the watch manufacturing industries of Canada. They immediately protested, saying they were not manufacturers or producers of watches. They also said, of course, that they were not importing watches; and they urged that they should be freed from this 10 per cent excise tax. Ten of those manufacturers took this exception and held several meetings with the officers of the department. Those representations failed, as I think most of us would say they must fail. The parts came into the country; a watch was sold to the retailer. In the interval someone must have manufactured or produced a watch. The department said the person who put the case and works together had manufactured the watch, and it was at that stage that this 10 per cent excise tax was to be levied.
When these representations failed an appeal was made to the Supreme Court of Ontario on May 7. It asked two or three things. The key point, as was mentioned by the hon. member for Eglinton at page 3320 of Hansard, was the request for*a declaration that they were not manufacturers or importers within the terms of the resolution; that the excise tax was not applicable at the time of import, and that they were entitled to import without the manufacturer's or sales license.
The house prorogued without passing the budget resolutions, and the matter was then left in the position that the repeal of the
Excise Tax Act
retail purchase tax had been announced, and of course the jewelers of the country had stopped collecting that. The imposition of a 10 per cent excise tax had been announced on the goods formerly subject to the retail purchase tax, which of course included clocks and watches; but there was no law to enforce compliance by manufacturers or producers of those goods. The situation in this country has been mentioned many times in this house. The night the Minister of Finance makes his budget address he announces certain tax changes. Most of them come into effect at midnight that night. It is quite true that often weeks, and in this case from seven to eight months, elapse between the introduction of the budget by the minister, the introduction of the resolutions, the introduction of the bills founded upon them, the adoption of the bills by the House of Commons and Senate and royal assent; but it has been the custom in this country since confederation that when these tax changes are announced by the minister they are regarded as being in effect from the time the minister indicated they would be. If subsequently, though this has never happened, the house should not approve the tax changes contained in those resolutions, of course the manufacturers and others who had paid those taxes would be entitled to refunds. Actually, of course, the practice is that the house has always endorsed the principle of those resolutions as contained in the bills, and the tax collection has been proceeded with.
We came back, then, in the fall; the budget was re-introduced, and the resolutions were re-introduced. Because of this question whether we had the right to regard the assembly of the case and the works as the production of a watch, and to make it quite clear that we were going to regard that as the manufacture or production of a watch, the new resolution specifically mentioned that fact. The hon. member for Eglinton called my attention to it when I was putting the resolutions through, and I said we thought we had that right anyway, as was shown by the regulations which were sent out in the form of a circular, but that to make it quite clear we were spelling it out in the bill. But in order not to prejudice the ease then before the courts we agreed to have this specific wording apply only from November 10, when the matter came to the public notice with the first reading of the bill.
I want to recapitulate the position of the government up to that time. The minister brought in the budget and announced that the retail sales tax of 25 per cent was to be dropped and an excise tax of 10 per cent was

National Defence
to be put back at the level of manufacture on those items. We had sent out a directive to the customs collectors and the industry and had actually started to collect the tax from nine of the ten watch manufacturers. This was appealed to the courts, and the case was before the courts when we re-assembled in the fall. To make it quite clear that henceforth we intended to regard that as manufacture we spelled it out in the bill. But we said we would not prejudice the case then before the courts, that the courts should decide whether or not we had the right to levy the tax at that level on the strength of the budget resolution of March.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.


Ralph Osborne Campney: In the absence of the Minister of National Defence (Mr. Claxton), Mr. Speaker, on his behalf and on behalf of the Minister of Defence Production (Mr. Howe), I ask leave to revert to motions to enable me to make a short statement.


Some hon. Members:: Agreed.


Ralph Osborne Campney: I wish to announce a substantial addition to the existing program for the construction in Canada of ships for the Royal Canadian Navy.
Orders have heretofore been placed for the construction of twenty-seven vessels for the Canadian navy on which work is now proceeding. The estimated cost of these orders already placed is ninety-six million dollars.
The additional orders now being placed total approximately sixty million dollars, and provide for the construction of twelve more ships. Included in these orders now being placed are seven destroyer escorts in addition to seven already contracted for; one loop layer; two steel crane lighters and two modified Norton class tugs. Of these new vessels one additional escort vessel will be constructed by Marine Industries Limited, Sorel, P.Q., where one escort vessel has already been ordered. Canadian Vickers Limited, Montreal, Halifax Shipyards Limited, Halifax, and the Burrard Drydock Company Limited, North Vancouver, will each build one of the escort vessels now being authorized, bringing
[Mr Sinclair.]
to a total of three the number of ships of this type being built by each of these firms.
Three shipyards which have not previously received orders for escort vessels are each undertaking one of the remaining three. These are Yarrows Limited, Victoria, B.C.; Victoria Machinery Depot Company, Limited, Victoria, B.C.; Davie Shipbuilding and Repairing Company Limited, Lauzon, P.Q.
The loop layer will be built by George T. Davie and Sons Limited, Lauzon, P.Q.
One steel crane lighter will be built at the Pacific Drydock Company Limited, North Vancouver; the other at Saint John Drydock Company, Limited, East Saint John, N.B.
The Saint John Drydock Company will also build two Norton class tugs.
The placing of the orders above mentioned brings the construction program for the Royal Canadian Navy to date to a total of one hundred and fifty-six million dollars covering the construction of thirty-nine ships.



EXCISE TAX ACT

[Stage Direction]
The house resumed consideration of the motion of Mr. Abbott for the second reading of Bill No. 294, to amend the Excise Tax Act.
James Sinclair: Mr. Speaker, at six o'olock I had been discussing the case which was referred to in Hansard as the Gruen watch case and which was raised by the hon. member for Eglinton (Mr. Fleming) on May 23 when he alleged bad faith on the part of the government with regard to the undertaking given by myself as parliamentary assistant in the budget debate in the fall of 1949. I had reached the point where the ten watch companies had met with the government and then decided to file suit. Before suit was filed, however, five of the companies withdrew. They had been paying the taxes. One of the companies which withdrew was the Gruen watch company, and I believe they feel it is rather unfair that the case that went to the supreme court and to the court of appeal should be referred to as the Gruen watch case, because they accepted the ruling and had paid their taxes.
Chief Justice McRuer gave a lengthy judgment, of which I shall quote only two little parts that to me as a layman seem to be the pertinent ones:
The effect of the provision that sections 5 and 6 should come into effect as of the tenth of November, 1949-
That was the undertaking I gave in *the house so as not to prejudice the case which was then before the courts.
-for the purpose of this case is to leave it open to the court to decide whether the other retroactive aspects of the suit in fact apply to the plaintiff.

When he talks about "other retroactive aspects", he is talking only as far as the court of law is concerned; because when the minister on budget night in the spring had announced the changes, as far as the country was concerned the changes were in effect that night. It has been the custom since confederation to accept those changes as of that night, although the actual legal royal assent did not come until the bills had gone through both houses of parliament some time later.
Then Chief Justice McRuer goes on to say this:
I cannot find that the simple operation of putting a watch movement into a watch case is manufacturing a watch in the ordinary popular and natural sense of the word, but I feel clear that the plaintiff produced watches adapted to household or personal use.
I now come to the key part of the judgment:
X therefore find that for the purposes of the Excise Tax Act the watch movements as imported were not watches.
And we agree with that.
That being so, the inescapable conclusion is that the plaintiffs by importing movements and placing those in watch cases so that they might be convenient and1 useful for personal use as watches are producers of watches adapted to household or personal use and therefore are now liable to pay excise tax and sales tax pursuant to the retroactive provision of the amendment of 10th December, 1949, on deliveries made to purchasers on and after the 23rd May.
And then the last part of his judgment which appeals to me:
Having found that the plaintiffs were producers of watches adapted to household or personal use since 22nd March, 1949, under the state of the law as it now is they have been liable to pay the excise tax according to the terms of the statute since that time. No useful purpose could be served by making a declaration that they were not liable to pay the tax until the statute of 1949 with its retroactive effect had received the royal assent.


Donald Methuen Fleming: Note the words "that its retroactive effect".


James Sinclair: But again the retroactive effect is not the effect of the amendment I moved in November, 1949. The retroactive effect he is talking about is the effect resulting from the fact that the act did not receive the royal assent until December, although the intent of the budget and of the resolution had been stated here by the minister on March 23, that spring; and the custom of Canada since confederation has been to put these taxes in effect immediately until such time as the act is passed. That is the retroactive effect to which Mr. Justice McRuer refers. He makes it clear that he is separating the amendment which was proposed by
Excise Tax Act
me from the other inevitable retroactive effects from our way of implementing the budget resolutions.
The case went on, of course, to the appeal court; but it is significant, as I said, that although ten started out, four of them dropped out before the case went even to the supreme court; and after the supreme court hearing five others dropped out, leaving just the one company, the Bulova watch company, which had voluminous correspondence with the Department of National Revenue and with the Minister of Finance (Mr. Abbott) in which these facts had been repeated. They went to the court of appeal, of course, and the judgment of the supreme court was sustained in those parts that they were asked to adjudicate on and the other parts were not mentioned. .


Donald Methuen Fleming: The court of appeal-


James Sinclair: The court of appeal was not asked to discuss the fact of whether or not they were producers of watches. To the other members of the house who are not lawyers let me in a summary say a word-


Donald Methuen Fleming: That is not quite right.


James Sinclair: In March, 1949, the Minister of Finance stood up and mentioned many tax reductions. One of them was the removal of the 25 per cent retail tax on watches back to 10 per cent excise tax at the manufacturers' or producers' level. That reduction was a saving of $8 million to the taxpayers of Canada and it was certainly welcomed by the watchmakers of this country because the 25 per cent retail tax was a nuisance tax which interfered with sales. As is the practice under our way of bringing in budgets since confederation, those tax changes went into effect that night. It is quite true that as far as the law is concerned, they did not become law until royal assent had been given to the excise tax bill which in this case did not happen until December 10 of that year.
Nine of the companies paid their taxes. A case went to the supreme court on the claim of the Bulova watch company, first of all, that they should not have that excise tax levied on the works, case and the display case which they imported separately. But that was not a watch. We all agree that that was not a watch, we who are not lawyers. However, when the case, watch and works were put together and sold to the retailer, it certainly was a watch; and the Department of National Revenue, in their directive to the trade in April, said that that process was going to be regarded as the production of a watch and that 10 per cent excise tax was to be levied there.
363:

Excise Tax Act
The companies protested. Naturally they would like to avoid taxes-not evade taxes but avoid taxes. After discussion with the department six of them went to the supreme court and the chief justice ruled in effect that we did not need that fall amendment spelling out precisely that the assembly of the case and the watch was the production of a watch, but that the spring resolution had covered this point. He ruled that the intent of the change in March placed that tax at that production level. The case was appealed to the court of appeal by just one of the ten companies. I may say that nine of the ten companies have paid the tax without question. To the ordinary person not versed in law it would be inconceivable that there should be any place where a tax could not be placed on that watch; if we did not tax the separate parts coming in and did not tax them as they come together, then that watch could be placed in the hands of retailers without that excise tax which is levied on other producers and manufacturers.	[DOT]
There was no bad faith on the part of the government; there was no tearing into shreds and tatters the good faith of parliament. The provision which I made at the direction of my minister was that since there was this case before the courts we would spell out this expanded resolution to make it clear that we did so regard the assembly of the works and the case as the production. If then the courts, on the basis of the spring resolutions, should say that this was not the production of a watch, then from November 10 on we would collect because of the amended resolution. As it turned out, the chief justice ruled that that was the production of a watch, and so the excise tax was properly levied at that level.


James MacKerras Macdonnell: Mr. Speaker, we have before us a bill to amend the Excise Tax Act. This bill of course includes a section increasing the sales tax. When on April 16 I replied to the Minister of Finance (Mr. Abbott) I moved at the end of my remarks an amendment, from which I quote the following, as reported at page 2053 of Hansard:
The proposals of the Minister of Finance are unsatisfactory because they will inevitably increase the cost of living for all and especially for those least able to bear it.
This house condemns in particular, as inflationary, the increase by 25 per cent of the general sales tax and is of the opinion that the increase is unnecessary and unwise.
I wish to pursue that argument tonight because I am going to suggest to you, Mr. Speaker, that everything that has happened since that time has endorsed the arguments which were made then, and I am not going to give up hope, particularly as we now have a

minister who has become since then a doctor of laws honoris causa, and therefore we may have a more ready reception of the arguments which at that time did not succeed. I should like to bring briefly to your attention, Mr. Speaker, the fact that at that time among other things we were warranted by a great deal of expression of opinion in the press in believing that the increase in the sales tax was repugnant to the people of Canada. I should like to read briefly from some of the newspapers that I quoted at that time. First of all, the Ottawa Journal of April 11 said:
It would be wrong to say that what Mr. Abbott brought us yesterday was an anti-inflationary budget. All Mr. Abbott seems to have done is to impose levies sufficiently heavy to bring the sums required for the defence effort, with no theory or nonsense about stopping inflation.
The Windsor Star said:
To think the increased taxes will appreciably reduce the demand for a diminishing flow of goods is to be naive. The higher taxes are more apt to encourage demands for higher wages so the higher cost goods can be purchased.
L'Action Catholique mentioned a special aspect which would be of interest to the province of Quebec. It said:
The increase in the sales tax will automatically increase the provincial sales tax, since the latter is based on the price of the merchandise including the federal sales tax.
The Ottawa Citizen said:
The real shocker of the 1951 budget is the increase in the general sales tax to 10 per cent.
The Montreal Star, speaking of the general sales tax, said:
It will inevitably bring in its train demands for higher wages.
Now, Mr. Speaker-


Mr. Speaker:: Order. May I interrupt the hon. member for a minute? I do not know how far I should allow the debate to continue. The hon. member has recalled the fact that this question was discussed when the budget was before the house. There was a vote taken, and a decision was arrived at which negatived the views which are now being expressed by the hon. member. I do not like to be too strict in this regard, but I should remind him that I feel the question has been decided this year.


James MacKerras Macdonnell: Your Honour will remember that when the excise resolution was before us we sought to have it broken up into the different items. If I remember correctly at that time the Minister of Finance pointed out to us that although we were not getting the chance then to vote on the question of the sales tax, we would get a chance when we came to the excise bill itself. Your Honour may say, well, you

will get that chance when you come to the sales tax section of the excise tax bill; but it did seem to me that in view of the fact that that matter is one that may be voted on, it was proper, with Your Honour still in the chair, to raise the question which will be specifically raised when we come to that section.


Mr. Pouliot:: If the hon. member permits
me, he has quite a false impression if he thinks that any hon. member has forgotten what he said about it.


Donald Methuen Fleming: On the point of order, may I suggest to you, Mr. Speaker, that all that the house did on a previous occasion was to approve the introduction of a bill. It adopted the resolution looking to the introduction of a bill. It did that, and it did nothing more. When the bill was introduced the resolution adopted by the house was completely functus. Now we have a bill. Surely the mere approval by the house of the introduction of a bill is not to compass or narrow the normal scope of debate on second reading of a bill.


Mr. Speaker:: Hon. members realize that it is a rule of the house that when a question is put and decided it cannot be brought forward again during the same session. May I call the attention of hon. members to paragraph 332 of Beauchesne, third edition:
It is a rule in both houses, which is essential to the due performance of their duties that no question or bill shall be offered that is substantially the same as one on which their judgment has already been expressed in the current session.
An old rule of parliament reads:	"That a question being once made and carried in the affirmative or negative, cannot be questioned again but must stand as the judgment of the house." Unless such a rule were in existence, the time of the house might be used in the discussion of motions of the same nature and contradictory decisions would be sometimes arrived at in the course of the same session.


James MacKerras Macdonnell: May I suggest, Your Honour, that, as the hon. member for Eglinton (Mr. Fleming) has already suggested, what was done before was to pass a resolution preparing the way for a bill. That was some weeks ago. We now surely have a decisive action to take. May I reassure Your Honour by saying that I do not propose to go over all the ground of weeks ago, but what I chiefly wish to do is to suggest that there are certain things which have happened in the last six weeks. Surely, the decision that we are making when we pass this bill is a decision that we must make as of the present time. I suggest to Your Honour that we have a decision to make now in the light of the facts at the moment.


Mr. Speaker:: It was not my intention to stop the hon. member, but I thought I should
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bring to his attention and to the attention of the house what is the practice in this connection. The hon. member says that he is not going to discuss the point at great length. In view of that I think I should allow him to continue.


Louis Stephen St-Laurent: Just before the matter is finally settled, it would be desirable to point out that in fact the argument suggested by the hon. member for Eglinton, and repeated by the hon. member for Greenwood, is not accurate. It was not merely a resolution that a bill be introduced. The question that was raised was on an amendment to that resolution submitted by the hon. member for Greenwood himself, specifically challenging the increase of 25 per cent in the sales tax as being inadvisable and unnecessary; and the decision of the house negativing that assertion made in the amendment is found at page 302 of Votes and Proceedings.


George Alexander Drew: But in that respect the amendment on which the vote was taken must be regarded in relation to the subject matter before the house at the time the amendment was moved. It should be recalled that there was before the house at that time a motion to the effect that it was expedient that a certain bill be introduced. An amendment which raises other issues is simply for the purpose of showing reason why it is not expedient that the bill be introduced in the form in which it is.
It was upon that amendment that the vote was taken. I submit that on a number of occasions during the discussion it was pointed out that at a later time a bill would be coming before the house, and that on that occasion it would be possible to deal with this in relation to the specific sections of the bill which would then be under discussion.


Stanley Howard Knowles: May I say a word on the point of order? It seems to me that Your Honour should take into consideration the view which is expressed I am sure in two or three places in May and Bourinot. Thus far I have been able to find it in only one place, namely at page 317 of May, thirteenth edition, and it is contained in a sentence after the paragraph we all know so well which begins in this way:
It is a wholesome restraint upon members to prevent them from reviving a debate already concluded.
A little further along May says:
This rule, however, does not apply to debates upon different stages of a bill.
The other references, which I know are there, and I can turn them up if necessary, are to the effect that the different stages of a bill are considered all part of the same

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debate. It is permitted to refer back to the previous stages of the debate on the same proposition, so long as it has not been finally decided.
I would submit that if the amendment to the motion for Your Honour to leave the chair to go into the committee of ways and means dealt with a matter which had been finally disposed of by that amendment, we would have to consider whether that matter could again be discussed. But the matter has not been finally disposed of. The matter is in the bill, second reading of which is now before the house. I refer to the matter of raising the sales tax. That is one of the questions we are called upon to approve or disapprove in deciding upon a second reading of the bill. I agree that there is merit in the point Your Honour has raised, and that the Prime Minister has drawn to your attention; but I do offer for your consideration these two other thoughts, first, that the question of the sales tax is still before us, since it is one of the questions of substance before us in the bill and, secondly, I call Your Honour's attention to the citation I have read from May, like unto which there are others, to the effect that the rule against repetition does not apply to debate at the different stages of the same bill.


Mr. Speaker:: As I said a moment ago, I do not propose to prevent discussion of the matter, if it is not too extended. Hon. members will recall that the hon. member for Greenwood read an amendment upon which the house had come to a decision during the present session. He is proposing to discuss the amendment again. I do not think we should agree that that is in order. I have stated however that I am not stopping the hon. member at this time, but I would ask hon. members not to extend their remarks unduly in respect of a matter which has already been decided.


Alphonse Fournier: Mr. Speaker, I follow your argument concerning the discussion with respect to the increase in the sales tax. However, I would not agree with the hon. member if he proposed to move an amendment at this stage to that effect. It would be a substantive motion, and I do not think he would be in order in moving the same motion he offered on April 16, part of which was in these words:
This house condemns in particular, as inflationary, the increase by 25 per cent of the general sales tax and is of the opinion that the increase is unnecessary and unwise.
The hon. member for Winnipeg North Centre (Mr. Knowles) said this was a substantive motion, and that it was decided

during this session. The house did decide against the amendment, and I suggest it would be neither proper nor legal if moved a second time on the bill stage, when a decision has already been given by the house. I understand the rule to be that one cannot repeat the same motion at the same session on the same subject or in the same terms.
As to the discussion of the sales tax, I think it is perfectly correct to say that members of the opposition or any other members are free to discuss the bill before the house. But to move the same motion is not only a waste of time but, if I may say so, somewhat ridiculous, because there has not been any change since the vote was taken, and I can see no reason why an attempt should be made to change at this time the decision of the house. I think we might delay the decision on the point of order until the hon. member tells us whether he is moving the amendment.


Mr. Speaker:: There is no amendment
before the house at the moment, and thus far I have heard no intimation that any amendment would be moved.


James MacKerras Macdonnell: Mr. Speaker, I shall relieve the mind of the Minister of Public Works (Mr. Fournier) by saying that I do not propose to move the same amendment I moved last time.


Alphonse Fournier: Or any amendment of the same kind?


James MacKerras Macdonnell: That may be a matter of opinion. I shall stick to my statement, that I do not intend to move the same amendment, and I doubt whether the Minister of Public Works will later on think that I am trying to do so.
Now, Mr. Speaker, you have warned me to be brief, and I must be brief. I should like to go back and, if I may, recall to the house the points I made on the former occasion. I drew attention to the fact, in which the public is becoming interested, of the astonishingly erratic budgeting we have had for several years. I pointed out in particular that in 1950, after an estimated surplus of $20 million we had virtually $343 million, or 22 times as much as had been estimated. I stated my belief that there was no doubt that an increase in the sales tax would immediately increase prices, and I was bold enough to suggest that in all probability the $20 million surplus which the minister estimated would probably reach somewhere near $105 million, the estimated return from the sales tax; and I did suggest that that might be forgone.
That was on April 16. It is not often predictions are proved true so quickly as these predictions have been. In the first place I think no one now doubts that what we said

about the addition to prices as a result of the sales tax has in fact happened. And we have had an interesting comment on my prediction with regard to revenue, because in the month of April we have had a surplus of $121 million as against an estimate of $30 million for the whole year.
Now, not overlooking what the minister said about these figures not being indicative, on the other hand the minister has not tried to show nor do I think he could succeed in showing that there is any great reason to' believe that that month of April was so untypical as he would like to suggest. If, in fact, a mistake has been made the minister could easily tell us so. I would think more highly of this government if they ever admitted that they had been wrong. One of the things that worry me about them is that they always say they are right. However, the minister has not said they were wrong, and my feeling is that the real reason for this bad budgeting is contained, very briefly, put, in the Ottawa Journal of May 29. I shall read briefly from it. The Ottawa Journal says:
Why is Mr. Abbott so wrong?
Then it gives what I think is a very interesting and significant answer which I believe goes to the very root of the whole matter.
Because apparently he takes no account of inflation. In April, 1950, personal income-


Alphonse Fournier: On a point of order, Mr. Speaker. I believe this time the hon. member is really out of order. He is reading from a newspaper clipping a criticism of something that took place in this house during this session. If you look up the citations in Beauchesne you will find that a member cannot quote from a newspaper any criticism of legislation going through this house in this session.


James MacKerras Macdonnell: I quoted a
whole list of papers as long as your arm.


Alphonse Fournier: The hon. member
was wrong then, and he is still wrong.


James MacKerras Macdonnell: I did not
hear what the minister said. In the meanwhile I shall continue with what I was reading.


Mr. Speaker:: The point, as I understood
it-oh, I am sorry.


Jean-François Pouliot: If I may be permitted, Mr. Speaker, before you give your ruling I should like to say that a distinction should be made between newspaper clippings reporting speeches made ^utside the house by members of parliament, and comments made by the press about anything that happens in
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parliament. In the first place, any hon. member would be in order in quoting a newspaper report of a speech made by any hon. member outside the house. But when it comes to comments made by any newspaper concerning legislation brought before the house, then that is not in order. I submit, sir, that distinction should be made. The hon. gentleman cannot be in order if he quotes an article published in any newspaper containing a comment about legislation before the house.


James MacKerras Macdonnell: May I point out that this article says nothing about legislation at all. This has to do with the April revenue return. As a matter of fact, I do not think there is any reference to legislation. I am amazed that the Minister of Public Works (Mr. Fournier) could be so misled.


Alphonse Fournier: For the information
of the hon. member I shall read citation 306 in the second edition of Beauchesne:
It is not in order to read articles in newspapers, letters or communications emanating from persons outside the house and referring to, or commenting on, or denying anything said by a member or expressing any opinion reflecting on proceedings within the house.
Now, if the article contains any reflection on this budget bill or the speech made by the Minister of Finance (Mr. Abbott), I believe the hon. member is out of order. It is all right to quote newspapers and make a speech out of what is written in some of them, but we have to follow the rules once in a while.


James MacKerras Macdonnell: I must point out again, Mr. Speaker, that I think the Minister of Public Works is being misled. I cannot understand him at all. He is usually so reasonable, but tonight he seems to have got completely off the track. This article does not criticize anyone in this house. It is a comment on a statement made outside this house to the effect that there was a surplus of $121 million for the month of April.


Alphonse Fournier: On another point,
Mr. Speaker, I have to follow this up. If the hon. member is trying to urge upon the house something that does not relate to this debate, he is still out of order. He has to debate this bill, and nothing else.


James MacKerras Macdonnell: I can certainly see that the minister wants to prove I am out of order. He has given four different reasons now, and on which of them does he want to hook me?


Alphonse Fournier: On two of them.

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James MacKerras Macdonnell: As soon as I point out that one is wrong, he brings in another.


Alphonse Fournier: I am trying to follow you, but you are jumping all over the place.


Mr. Speaker:: Order. Probably I should
reread the citation which the Minister of Public Works has read. I have Beauchesne, third edition, and in that edition it is paragraph No. 265:
It is not in order to read articles in newspapers, letters or communications emanating from persons outside the house and referring to, or commenting on, or denying anything said by a member or expressing any opinion reflecting on proceedings within the house.


James MacKerras Macdonnell: I submit
with deference that nothing I have read reflects on any proceedings in the house, nor does it comment on any statement made by a member. It comments on a statement made by the Department of Finance.


Alphonse Fournier: Not relating to this bill.


James MacKerras Macdonnell: If the minister will let me finish it, I shall be through in a moment. I could have been finished by now.


Clarence Decatur Howe: The hon. member may just as well omit the whole speech. We would not miss it.


James MacKerras Macdonnell: The trouble is now that I do not know where I was. I shall have to go back and reread it. I hope all this is not taken off my time.


Mr. Speaker:: Probably I should remind the hon. member about a rule of the house to the effect that a member replying to a government motion is not limited as to time.


James MacKerras Macdonnell: Does the Minister of Public Works want to raise any other point?


Douglas Charles Abbott: Let us have Mr. O'Leary's views again.


James MacKerras Macdonnell: As I said, I shall have to begin over again to get the hang of this thing so that we shall get it right. It reads:
Why is Mr. Abbott so wrong?
That does seem a little like criticism, but that is all there is.
Because he apparently takes no account of inflation. In April, 1950, personal income tax collections totalled $49 million; in April, 1951, they were $70 million. This with the same tax rate. Clearly personal income tax collections were up because salaries and wages and net earnings generally were up, and because more wage earners had moved into higher income brackets.
And, of course, what is true of the income tax is true of other taxes, notably excise and sales taxes.
[Mr. Fournier (Hull) .3
There was more that I wanted to read, but perhaps it would be better not to do it or I might start up the Minister of Public Works again. What bothers me about the surpluses is that they are always given to us with a sense of pride. The minister really seems to regard them as a very clever performance. I have several times given this short quotation, Mr. Speaker, and I do not believe it is out of order. More than once I have quoted this short statement attributed to Philip Snowden, that any chancellor of the exchequer who takes even a half crown more than he needs is guilty of getting money under false pretences. Those are strong words, much stronger than the Ottawa Journal uses.
As I say, we are left with the impression that these surpluses are really rather clever. It is true the minister does remind us from time to time that rising costs have something to do with it, but nevertheless we are left with the impression that somehow these additional collections indicate health and wellbeing in the community. As the Montreal Gazette ironically says, we are really being asked to believe that the minister is budgeting "better than he knew." But what is actually happening is that these excessive collections are an indication of distortion in the economy. They are an indication of excessive taxes on high-priced goods. They are, as we pointed out before, a spur to wage and salary demands. They add to the increase of money in circulation because, after all, the government does not hide this in a napkin but spends it. Perhaps worst of all, it is just not possible to believe that you can have any sort of effort at government economy when all these hundreds of millions are floating about. The sad thing naturally that one always has in mind is that these increases of surplus never come from less spending; they always come from taking more of our money. Of course these sales and excise taxes put up prices. Then the increased prices put up taxes, and so on and so on, and we have this terrible spiral.
I just want to make the point that everything we predicted on the 16th of April has happened. Prices have increased just as we said would happen. The surplus is here just as we predicted would happen. Wage demands are here just as we predicted would happen. I suggest that the happenings of the last six weeks have greatly strengthened what we said at that time. For that reason, and in order that we may express our continuing disapproval of the sales tax, I am going to move:
That the word "now" be left out and the words "this day six months" be added to the end of the question.

I hope the Minister of Public Works (Mr. Fournier) will agree that is very different from what he thought it was going to be.


Alphonse Fournier: That is in order. Let us have the question right now.


Major James William Coldwell: Mr. Speaker, we had a long discussion of the sales tax in the debate earlier, but nevertheless I believe the protest that has been made tonight is worth making again because in my opinion the sales tax is probably the most oppressive tax that we have, and to raise it from 8 to 10 per cent at this stage is bound to increase the cost of living further. The cost of living index has reached the unprecedented figure of 182 points on the 1935-39 basis. That in itself is something that should cause us to stop and think when we are imposing a tax which is bound to increase the price of many commodities. It will not increase all commodities, and indeed not some of the basic commodities, but still it will increase the cost of many of the commodities that enter into the cost of living for a good many families in this country.
I think it is true to say that, no matter who suggests it, the sales tax is a tax which is unfair. It taxes those with families who have responsibilities that are escaped by those who have no families. It seems to me that the sales tax is a thoroughly bad tax. Tonight the hon. member for Greenwood (Mr. Macdonnell) has raised the question of the surplus that the government was able to show in April. Since that large surplus was shown at that time, it seems to me to indicate that the country can do without the 25 per cent increase in the sales tax suggested in the budget. Consequently, without prolonging the debate, because I think most of us said all that it was necessary to say at an earlier stage, I am merely going to say that we shall support the amendment moved because we believe that the recent receipts of the government indicate that we can dispense with this tax, and whether it is a good or bad tax we should dispense with it on that account. Secondly, because this is a tax which is liable to increase the cost of living in so many respects of those who are least able to afford it, I think the house is justified in asking that the imposition of this tax be deferred.


Solon Earl Low: Mr. Speaker, I said at one time that I was so much opposed to this tax that I felt I should talk against it until next Christmas if necessary to have it held up or to oppose it so successfully in that way that the government might decide not to pass it. The government has very obligingly suggested today
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giving me a couple of months to get my breath so that I can go on talking about it this fall and probably right up until Christmas. I will continue to do so on every occasion that I have the opportunity. I am opposed to the imposition of the increase in the sales tax, and I have not found anything yet in reason, logic or argument to make me change my mind. When it comes to voting on the bill I shall know what to do about that section particularly, but as to the amendment moved by the hon. member for Greenwood (Mr. Macdonnell), since it appears to cover the whole bill it might make it very difficult for some hon. members to support it because there are things in the bill that are good, and I should like to see them passed. Therefore I shall have to think much more carefully than I have thus far as to whether I can support the amendment.
I rose tonight to speak briefly about another provision in the bill, and I can make a much more informed appeal than I was able to do on May 1 on behalf of many thousands of suffering Canadians. On May 1, as hon. members may recall, I raised a question, as recorded at page 2599 of Hansard, as to whether the Minister of Finance (Mr. Abbott) would consider adding the substance known as vitamin E to the list of tax exempt substances now taken care of in section 12 of the bill. At that time the Minister of National Revenue (Mr. McCann) said:
Wheat germ is the cheapest one there is.
I said:
Yes, it may be the cheapest, but this particular one is subject to sales tax, and the tax increases the price to a considerable extent. It puts it outside the reach of many patients.


Mr. McCann:: Not at all. You can get all the
vitamin E you want in wheat kernels.
We continued with an exchange of views, and it appears that neither of us knew very much about it at that time.


James Joseph McCann: Speak for yourself.


Solon Earl Low: Well, I shall give evidence to show that the doctor did not know what he was talking about. Mind you, I want to say to begin with that I am not blaming the Minister of National Revenue for not being able to keep up with the latest discoveries in medicine because-


James Joseph McCann: Much less yourself.


Solon Earl Low: -he is so completely occupied with finding ways and means of exacting taxes and finding the best means of collecting them that he cannot possibly keep up with these things, and I would not expect him to. However, the question I must ask first is: What is the material about which I was asking on May 1? I

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was referring at that time to high potency vitamin E concentrate which goes under the scientific name of di-alpha tocopherol. Wheat germ oil contains minute fractions only of vitamin E. If a patient has to take 300 international units of vitamin E daily, which would be about the equivalent of 300 milligrams, and that by the way is an average dose-


Jean-François Pouliot: If the hon. member will permit, he did not mean 300 kilograms.


Solon Earl Low: No, I said milligrams. Certainly I would not say kilograms. I say if a patient is to take a prescribed dose of about 300 international units or the equivalent of about 300 milligrams of vitamin E, and has to resort to wheat germ oil to fulfil this dosage, he will have to consume in one day more than a quart of wheat germ oil. I am sure the Minister of National Revenue knows the ill effects that would follow; neither his stomach nor mine could stand it. I would go further and say that this quantity of wheat germ oil simply could not be tolerated by any person. This patient would require at least 150 capsules of ordinary vitamin E such as you buy in the drug store today to make up this dosage; and the cost of those 150 capsules would probably be as much as $7 a day, which would be simply prohibitive.
High potency vitamin E is a concentrate that is obtained through a process of molecular distillation of the oils of cottonseed, peanuts and green vegetables. It appears to be manufactured by only one firm; that is Distillation Products Incorporated, a subsidiary of the Eastman Kodak Company of Rochester, New York. It is therefore imported into Canada in large drums and then encapsulated into 75 milligram capsules. The population of Canada is not sufficient to warrant the huge expenditure required for the manufacture of alpha tocopherol.
The second important question we have to ask ourselves is, what is the product used for? Well, Dr. Evan V. Shute and his brother, Wilfrid E. Shute, discovered after years of research and clinical work that vitamin E in heroic doses, that is in huge doses, was very valuable in the treatment of heart and circulatory diseases. These doctors then founded the Shute institute for clinical and laboratory medicine in London, Ontario, and have been carrying on successfully since. These doctors prescribed a dosage of from 300 to 400 international units daily for victims of cardiovascular ailments, which of course would include thrombosis, Buerger's disease, thrombophlebitis, indolent ulcers, angina and hypertension. These are the diseases which, if the present trend continues, 
will take off every other person in Canada who is now over 40 years of age. That is the record to date; that seems to be the trend.
Since the Shute brothers discovered the value of alpha tocopherol in the treatment of cardiovascular ailments, many doctors of this country and the United States and other countries have taken up the research. In many countries they have issued their bibliographies, and their findings have been almost identical with those of the Shute brothers.
The next question is how widely is alpha tocopherol distributed. This substance, as I said, is high potency vitamin E. How widespread is its use today? Well, one pharmaceutical house I asked told me they did not know exactly but their records alone indicated that many thousands of cardiac and vascular victims are resorting to high potency vitamin E with success. They know from their records that several thousand doctors in Canada are prescribing alpha tocopherol, after the Shute therapy, to their patients. To their personal knowledge over 1,500 doctors and most of the major hospitals are prescribing vitamin E; and remember, this pharmaceutical house is only one of thirty Canadian pharmaceutical firms distributing vitamin E products in Canada. I am convinced that more than one-third of Canada's nine thousand doctors prescribe it today for therapeutic and for what may be called prophylactic treatments. What is more, of the more than six thousand patients on the files of the Shute institute at London, more than 160 are medical doctors and members of the immediate families of doctors. Just here I should like to put on record a telegram I received from Dr. Nelson George, because it indicates what doctors themselves think of this thing:
As a physician practising in London for thirt) years would like to record my experience with vitamin E. Have been a diabetic for twenty years. As a result five years had a hemiplegia with residual weakness left leg and arm. One year ago for diabetic gangrene had right leg amputated above knee. Last fall when amputation of left leg imminent for diabetic gangrene I began vitamin E treatment under Dr. Shute's care. Left leg healed rapidly and has regained function so that I can now stand on it unassisted. I am no longer a diabetic, no longer a hypertensive. Want to stress that as physician had best care available in London yet continued to be a diabetic and hypertensive and eventually developed gangrene with their care; lost the first leg above the knee. On vitamin E gangrenous area healed and filled in; had partial restoration of function, absent for five years. Am no longer a diabetic and no longer a hypertensive. The necessary dosage of alpha tocopherol (vitamin E) was 450 international units, about 150 times that available in one capsule of wheat germ oil with latter cost $7.25 daily, with imported concentrated brand retail cost 54 cents a day. No human stomach can tolerate that much vitamin E in form of wheat

kernels, wheat germ or wheat germ oil capsules, 150 capsules daily. My wife has been my nurse since my amputation. She is willing to appear before you or Dr. McCann or the Department of National Health and Welfare. I am willing to be interviewed by any member of dominion house.
That is from a doctor who himself has had the treatment for some time, and who cites the results. Just here I might comment briefly that heart ailments are the greatest killer of all. One-half of the adult population of this country will meet untimely death as the result of one form or other of vascular trouble. Doctors especially find themselves susceptible to these diseases because of the very high tension under which they have to work.
The next question is whether there is scientific backing for the claims made for this product. Well, Mr. Speaker, it is not claimed that high potency vitamin E is a perfect answer to the problem of heart disease. It is not, and that is frankly admitted. But it is therapeutic; that is, it has curative value. That has been amply demonstrated in extensive research using nine different species of animals, as well as in the treatment of thousands of cases among human beings.
There is another side to this question. If alpha tocopherol is used prophylactically, that is for preventive purposes, it should achieve considerably more than it has been able to achieve in the treatment of advanced cases of heart disease. It appears that the real future value of the vitamin E product will be in the preventive field. The preventive use of alpha tocopherol might well begin in childhood, and the Canadian public should be educated to this kind of medical insurance, which to my mind it certainly is. At the same time Canadian millers might be induced to make available to the public a cereal flour rich in germinal vitamins.
There is a mass of pertinent evidence to support the assertion that the appalling mortality among men resulting from heart diseases has arisen from a deficiency of alpha tocopherol in the diet. In other words Canadians have been slowly starving themselves into sudden death from thrombosis or a more lingering and painful demise from angina or hypertension. The greatest single factor contributing to this slow starvation and early death is a deficiency of vitamin E. Many thousands of Canadians suffer from chronic deficiency of the alpha tocopherol type of vitamins in their diet. The substance is found widespread in certain natural foods but its principal sources are in the cereal grains. Modern milling, in the effort to achieve a stable, exportable flour that will not turn rancid, and which will have a fine, white
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appearance, has taken out all of the germ of the cereal grains. Consequently there is a vitamin E deficiency in the diet of the people.
Chronic shortage of vitamin E of the alpha tocopherol type damages the heart muscles and the walls of the arteries of the circulatory system. If our Canadian people, from their childhood, would use whole wheat bread made from freshly-milled whole grain flour and plenty of fresh vegetable oils, it is practically certain that untimely deaths from heart disease would be many times reduced from the number that are experienced amongst our population today.
It is not surprising that so many of our people are having to resort to a therapeutic treatment based on the use of the vitamin in which their diet for many years has been tragically deficient. I might say here Mr. Speaker, that there are analogies in medical science to the use of heavy doses of vitamin E in the treatment of heart disease. In particular I would remind the house that, for instance, in cases where insulin shock results, physicians prescribe high and heavy doses of insulin to cure it. There are other analogies that I could cite.
I do not want to take too much time, Mr. Speaker, but what about the price to the people who use this product? I was able to obtain this product that I hold in my hand for the purpose of showing it to the house. I have no particular reason for naming this particular one other than that I could get it quite easily. What about the price to the people using what is known as Webber Vita E capsules, as an example? And by the way, hon. members can see the size of the capsule I hold in my hand. The capsules are a fairly good size; and they contain 75 milligrams or 75 international units. Using that one as an example, the retail price per 100 of these 75 international unit size capsules is $9. The retail price per 1,000 of the same size is $80. The return to the manufacturer is $4.50 per 100 or $40 per $1,000. The sales tax is paid by the manufacturer and is absorbed into the general price structure. The sales tax in this instance is based on the lowest discount price. It is not based on some of these other prices I quoted, but on the lowest discount price and1 therefore amounts to 10 per cent of $4 when one is buying a bottle of 1,000. But if the sales tax were removed from this product, there would be a saving of $4 per 1,000 to the wholesaler, which would mean a saving of $8 to the consumer, on 1,000.
Here is a right good example of the way in which a sales tax at the manufacturer's level pyramids prices. To be able to secure "gelucaps", as these things are called, the

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government causes the heart or vascular patient to have to pay $8 in increased prices. That is a terrible thing.
In addition to the sales tax, this product, and all others of the same class, are subject to customs duties of 15 per cent, because there seems to be only one source, namely, Distillation Products Inc. of Rochester, N.Y., It is imported into Canada as a concentrated oil in large drums and then is made into capsules for distribution to patients. Duty involves another 60 cents at wholesale level, or $1.20 at retail level per 1,000.
I have been puzzled a great many times as to why the government should require customs duty to be paid on a product of this kind; I refer to vitamin E concentrates. It has never been manufactured in Canada. That being so, the product is not competitive from the tariff point of view. I was always under the impression that tariffs were designed mainly to protect our basic manufacturers. In this particular instance, no Canadian manufacturer is protected and for that reason, it seems to me, the consumer, the heart patient, carries an additional burden for no good reason at all. The reason for removing the tariff as well as the sales tax from vitamin E concentrates would appear to be quite obvious to even the most casual thinker. All in all, the patient-consumer can save $10 per 1,000 by the removal of the sales tax and customs duties on this particular product.
Let us now take a look for just one moment, in conclusion, at the daily cost of this material to the patient. The prescribed dose may run from 300 international units to 450 international units a day, or 4 to 6 of these gelucaps of the size of the one I have in my hand. On that basis the present cost to the patient would be 36 cents to 54 cents a day when buying them by the hundred, or 32 cents to 48 cents a day when buying them by the thousand. It is clear that the present cost to any patient is a very heavy burden for him to bear. It must be remembered that cardio-vascular patients must continue to use the product every day of their lives, just as is the case with insulin and diabetics. It is a pitiful thing, to me at least, to learn of patient after patient who has been unable to earn money for months or years, has a family to support, and yet feels that somehow or other he must get together enough money to buy his vitamin E at the rate of 32 cents to 54 cents a day. Persons in that .situation either go without the necessaries to do this or find they must discontinue treatment and lapse into illness as a consequence.
Today I am making an appeal to the Minister of Finance (Mr. Abbott) on behalf of

the thousands of Canadians who are suffering from cardio-vascular ailments. I ask the minister to add vitamin E-that is high potency vitamin E; the type known as alpha tocopherol-to the list of drugs to be made sales tax free. I appeal to the Minister of National Revenue (Mr. McCann) and ask him to remove the customs duty on this item which must be imported from the United States. I want to thank the two ministers and their colleagues-and I do so sincerely- for what they have done for arthritics and other sufferers by removing the sales tax from such things as ACTH and cortisone.
I think that is a step in the right direction. But at the same time I urge them to learn about vitamin E and the beneficial results it brings to heart patients. Here is a chance, it seems to me, to help thousands of worthy Canadians at very small cost to the government by way of lost revenues.
Just in conclusion let me say this. There is in Canada today an association known as the Vitamin E Association. It so happens that one of the members of this house is one of the high officials in that association. They call it the Vitamin E Society of Canada. Its headquarters is in Toronto. If that gentleman who is one of the high officials-in fact, he is the president-cares to speak, he could tell you tonight that his wife, who was for many months on her back, helpless, with heart disease, and given only 3 months to live in the opinion of heart specialists, was taken to the Shute institute and after a few months of treatment with alpha tocopherol was able to get up and be around, and is now holidaying, or was a short time ago, in California and was getting along fine. There are others in the house who have had experience with the product, and who could speak of the benefits from its use. Certainly it would seem to me to be a case worthy of most real and earnest consideration, and I ask that of the ministers tonight.


Donald Methuen Fleming: Mr. Speaker, I hope that the house will support the amendment introduced by the hon. member for Greenwood (Mr. Macdonnell). Any doubt that hon. members opposite may have had a month ago in regard to the imposition of the 25 per cent increase in the sales tax must surely have been removed in the light of the statements issued since then from the treasury.
In his budget address the Minister of Finance proposed such taxes should be levied as, according to his figures, would produce at the end of the fiscal year a surplus of $30 million. The figures that were released for the month of April have shown an astounding result. After paying all expenditures for that

month, the first month of the fiscal year, the minister has reported a surplus of $121,520,000, just four times the surplus in one month that he budgeted for for the entire twelve-month period. It is not sufficient, Mr. Speaker, for the Minister of Finance to say:	Oh, well, this picture may
change before the end of the year. I submit that we have here already a very fair test of the kind of budgeting that has entered into the calculations of the Minister of Finance in the course of which he has asked this house to authorize the imposition of greatly increased taxes, particularly of the most objectionable of all varieties, at a time like this, which will increase the cost of living of those least able to bear it, taxes also which are subject to the vice of taking far more out of the pockets of the consumers, the ultimate consumers, than are yielded to the treasury in tax revenue.
Let us compare these figures with those of the first month a year ago and, sir, in approaching those figures let us have this in mind: most of the increases in taxes which are contemplated in the budget resolutions, and part of which are provided for in the bill now under debate, had not come into effect in the month of April, so that what we are dealing with in these figures for the month of April are taxes levied chiefly at the rates prevailing in the fiscal year which closed on March 31 last. There is very little of the increases in taxes, even in those indirect taxes, that find their way into the figures to which I am now about to refer, and none of the increases in the corporation taxes and in the personal income taxes of course become effective until July 1.
I think the dating of some of these taxes is worthy of note. People, of course, are not going to be too conscious of these indirect taxes because they are going to be covered up. That is one reason the government likes taxes like the sales tax and the excise tax, which they have increased so substantially. They are covered up, and the people who pay them are not conscious of the fact that they are paying them. The people are conscious of paying taxes like the income tax, and so the government has provided that these increases in the direct taxes, of which people will be very conscious, will not take effect until July 1. Perhaps, Mr. Speaker, it is a mere coincidence that four by-elections take place in this country on June 25, just six days before these increases in the direct taxes come into effect.
Sir, the figures for the month of April, to which I am about to refer, are to be found in the issue of the Canada Gazette of May 26, 1951, at pages 1502 and 1503. There we shall
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see that on the revenue side the minister's receipts in April, 1951, as compared with April, 1950, are increased on every item except two. I will just give the nearest figure in millions. First, the customs import duties show an increase. They are doubled from $14 million to $28 million. The excise duties are increased from $14 million to $17 million. The excise taxes are increased from $13 million to $24 million. The income taxes on individuals show large increases. Deductions at the source are increased from $12 million to $26 million. Other collections, that is, of income tax against individuals, are increased from $37 million to $44 million. Corporation taxes are increased from $38 million to $60 million. Succession duties show a slight decrease from $5 million in April, 1950, to $3,500,000 in April, 1951. Miscellaneous tax revenue has increased from $10,000 to $21,000. Postal revenue has increased from $6,500,000 to $7 million. Return on investments shows a slight decrease from $3,600,000 to $3,500,000. Miscellaneous non-tax revenue has increased from $320,000 to $601,000. The total receipts of ordinary revenue are increased from $147 million to $217 million. There is a decrease in special receipts, and the total revenue figures show April, 1950, $166 million; April, 1951, $218 million.
What is going to happen, Mr. Speaker, to these swollen figures when the full effect of the proposed increase in taxes of the Minister of Finance reflects itself in the figures for succeeding months? These figures are going to engage in a runaway race from last year's figures, and next year we shall inevitably again face the picture with which we have grown altogether too familiar: the Minister of Finance coming in with his budget and claiming great credit to himself for showing a surplus far in advance of that pictured to the house when the house approved his tax proposals the previous year. That is not sound budgeting. If the Minister of Finance will include in his budget proper provision for debt reduction, I am sure the house will be glad to consider any such proposals on their merits, but this indirect way of doing outlandish budgeting, which builds up surpluses far in advance of those offered to the house by the Minister of Finance in inviting the house to approve his budget proposals, is completely unsound. I submit, Mr. Speaker, the time has come when the house must say, this must stop. When we see figures like these for the month of April indicating how far the Minister of Finance has erred in the figures that he put before the house in his budget speech six weeks ago, then I think the house will start right now on this bill and say, we are not going to impose these heavy tax increases on people

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who are having really a desperate time to meet the soaring costs of living. We are not going to do it when the Minister of Finance cannot prove need.
Sir, the figures that were announced for the month of April also reflect increases in expenditure for the month of April over those of a year ago, $88 million in April, 1950; $97 million in expenditures in April, 1951. So, let it not be said that the weight of increased government expenditure has not been reflected in the April figures. The $121,500,000 surplus of revenue over expenditure in April last as compared with April, 1950, takes into account increased expenditures, and reflects in only a very minor degree the increase in taxes, the full weight of which will be felt by the people of Canada on and after July 1.
Therefore, Mr. Speaker, if there was abundant reason before for rejecting this increase in taxes, particularly this sales tax, this most inflationary of all the budgetary weapons being wielded by the Minister of Finance on the people of Canada today, there is infinitely stronger reason for rejecting this increase in taxes today.
It is well to bear in mind, Mr. Speaker, that the statistics just released by the dominion bureau of statistics show another increase in the cost of living for the month of April. It is true it is a much more modest increase than those we have been accustomed to in recent months, but the fact of the matter is that even though the cost of living index has shown a slight decrease in the figures of the cost of food, the total cost of living for the month of April has shown another fractional increase, and we are now faced with a situation where the cost of living is higher today than it was when the budget resolutions were adopted. In the face of all these facts surely the house will not be party to imposing these cruel increases in taxation when there is no need of them.
Having appealed to the house to support the amendment of the hon. member for Greenwood (Mr. Macdonnell), which is intended to defeat these proposed increases in the sales tax, and which is intended to offer to the people of Canada such protection as parliament can offer them against an increase in this inflationary sales tax, I turn now to the subject discussed by the parliamentary assistant to the Minister of Finance.
Let me say in the first place that I do not think it was altogether fair of the minister to leave these matters to his parliamentary assistant because there are errors I think that the-[DOT]


Douglas Charles Abbott: He handled it very well.
TMr. Fleming.]


Donald Methuen Fleming: There are errors the parliamentary assistant has made unintentionally in connection with the interpretation of the judgment to which he referred.
I do say, however, in regard to the case put forward by the parliamentary assistant tonight on behalf of the government that it is a most disappointing answer, and shows that apparently the government is entirely unrepentant in its denial of justice. It is entirely unrepentant in its breach of faith with the house. And mere sophistry of the kind we listened to this afternoon and evening, however plausible it may sound, is no answer to the indisputable fact that the government, in permitting the parliamentary assistant to say what he said to the house on November 30, 1949, and taking the stand it has taken today, and which it has consistently taken throughout the litigation in the courts, is breaking faith with the House of Commons.
The parliamentary assistant did not say very much in his speech today about the undertaking he gave the house on November 30, 1949. He did not read the text of it to the house. He rather put a gloss on his remarks containing that clear and unequivocal undertaking which was accepted by the house at face value. And so we have a sort of paraphrase on the part of the parliamentary assistant tonight of what he said on that occasion in clear and unambiguous words.
The parliamentary assistant has sought to argue the government's case against the watch companies. The only thing wrong with the way he argued it tonight is that it is entirely contrary to the way the courts decided it. The courts had before them the legislation and the facts to which the parliamentary assistant has made reference. They had all those before them; and having heard them all, and having duly heard the extended arguments of very eminent counsel on both sides as to the proper interpretation of the relevant portions of the Excise Tax Act, especially the 1949 amendments, reached a decision quite at variance with that offered to the house tonight by the parliamentary assistant.
The net result of the litigation is that the courts have held that these plaintiffs were entitled to everything they asked for in the action which they brought in May of 1949 for a declaratory judgment. They were entitled to everything. And now, in the net result, the courts have felt obliged to deny to these litigants the fruits of their action, the rights to which they were entitled, simply because this house enacted an amendment on November 30, 1949, which it not only

did not understand it was enacting, but which is just the very opposite of what it was told was the effect of the amendment being introduced by the parliamentary assistant at that time on behalf of the government.
The parliamentary assistant has said this afternoon-and he is referring here to the statement he gave to the house as to the effect of the amendment which he was undertaking, in the discussion of section 5 of the 1949 amendment, to introduce at a later stage of the bill-
But we said we would not prejudice the case then before the courts.
The government has said through its spokesman today, referring to what was said in the house on November 30, 1949:
But we said we would not prejudice the case then before the courts.
Sir, that is precisely what the government did. That is precisely what the government did in misleading the House of Commons as to the effect of the amendments which the house was being called upon at that time to enact, and which the government then put into operation in this legislation with the avowed purpose-there could be no other- of repudiating its own undertaking.
They have said here, as they said in the house, that those amendments would not be made retroactive to have a bearing upon the litigation then before the courts. All that is asked, all that is required in the name of simple justice and decency and good faith is that the government should make good what it said, namely that it should not by the amendment of November, 1949, or the use it instructed its counsel in this litigation to make of the amendment, prejudice the case then before the courts.
But that is precisely what the courts have found that the government has done. The parliamentary assistant has undertaken to interpret the judgment of Chief Justice McRuer. Let me stop to put him right upon that by referring to two brief passages in the judgment where the learned chief justice said:
I place my judgment on the claim set out In paragraph (a) of the prayer on the footing that the retroactive provisions of the act of 1949 apply to the plaintiffs . . .
The whole point which the parliamentary assistant has missed is that as the resolution stood when introduced on the eve of an election in March, 1949, and left suspended in mid air during the election campaign and until November, it could have no bearing to create a tax liability on the part of persons engaged in the kind of business that these plaintiffs were engaged in. Then when parliament is invited to enact an amendment to the act on
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November 30, 1949, this question is raised: Will the amendments which are being put before the house now have any retroactive bearing on the case then before the courts? Let me read what was said in the house at that time. I said this, as reported at page 2503 of Hansard for November 30, 1949:
Sections 5 and 7 are related for the purposes of the matter I should like to raise, which has to do with the imposition of an excise tax on the assembly of watches, clocks and certain kinds of jewelry. If I am correctly informed, this has become the subject of litigation as well as having been agitated by correspondence with and representations to the government. I understand that this litigation is pending and I am concerned as to whether this legislation will not cut right across the issues involved in the pending litigation which directly concerns the government.
The answer of the parliamentary assistant, as I have said, was clear and unequivocal in these words:
The hon. member has put his finger on an amendment which I propose to move a little later. It is quite true that a case involving sections 5 and 7 is now before the courts, but I would direct his attention to the fact that section 14 provides for the coming into force of sections 5 and 7. When that section is reached I propose to have a minister move an amendment which would change the present date of March 23, 1949, to November 10, the date when first reading was given to this bill. There would then be no retroactive effect which would have a bearing on the cases before the courts.
And, sir, the courts have held that that is precisely the effect of the amendment, that it does apply to the cases in court, that it has a retroactive effect, and that it defeats the claims that the plaintiffs in the litigation would have been entitled to recover but for the imposition or enactment of this retroactive legislation in breach of the undertaking given to the House of Commons by the government.
The parliamentary assistant has apparently overlooked the fact that, as to those matters in which Chief Justice McRuer held the plaintiffs not completely entitled to the remedy they sought in their action, the Court of Appeal supplied what was lacking, because the Court of Appeal allowed the appeal of the same litigants as against the crown, and held that the plaintiffs were completely entitled to all aspects of the declaratory judgment which they sought. The only thing that defeated these litigants was this retroactive legislation enacted by parliament in the very teeth of the representations made to the house at that time in the clearest possible language. The Court of Appeal went so far as to award the costs of the action against the crown. Let me read these excerpts from the judgment of the Court of Appeal of Ontario to put right the statement made to

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the house this afternoon by the parliamentary assistant, who trespassed too deeply into interpretation of the decision of the court. This is the decision of the Court of Appeal, and it was a very strong five-judge court. As you well know, Mr. Speaker, a panel of five judges is assigned in the Court of Appeal of Ontario only to cases of leading importance. This is a unanimous decision of the five learned justices of appeal, and these are excerpts taken from the judgment of the court as read by Mr. Justice Aylesworth. He says:
I think that the case is clearly one in which the appellant is entitled to the formal declaration of the court as to its rights. So far as now relevant the declarations sought for, in essence, would assert that the appellant is entitled to secure entry through customs of certain component parts for watches without payment of excise tax upon such entry and without the issue of a manufacturer's and1 an excise licence for that purpose.
Then he makes reference to the pleadings, and in speaking of the rights of the plaintiffs he says:
Those rights, in my opinion, should have been and ought now to be stated by way of formal declaration in the judgment itself.
Then he proceeds to indicate in detail the various provisions in the declaratory judgment to which those litigants are entitled. What has happened, Mr. Speaker, is that a strong court in the Court of Appeal of Ontario, with a full panel of five judges, has said that these plaintiffs are entitled to everything that they sought in their action, and they would have had everything, had it not been that those rights were handicapped by retroactive legislation passed by this parliament. Now, that fact is crystal clear, and it will not admit of any attempt at being denied by the kind of sophistry offered to the house this afternoon and this evening by the parliamentary assistant to the Minister of Finance.
Sir, the only reason that this result has occurred, that this blemish has been cast upon the honour and good faith of the crown, is that the amendment introduced in the house on November 30, 1949, by the parliamentary assistant was not as he represented it to the house. I do not say that he intentionally misrepresented it to the house. I do not suggest that. But the fact of the matter is that the house was completely misled. The effect of the amendment, as the courts have found, so far as its retroactive application to litigation then pending in the courts was concerned, was directly opposite to what was represented to the house by the parliamentary assistant. Nothing could be plainer than this very contradiction between what the courts

have found to be the effect of this amendment, and the effect of it as represented to the house by the parliamentary assistant.
When this matter was under discussion a few days ago, Mr. Speaker, the Minister of National Revenue (Mr. McCann), whose department is responsible for applying these amendments to defeat the effect of them as stated in good faith to the house by a spokesman for the government, on that occasion said, "Well, why did you not check on that amendment to see that it went as far as represented?" Mr. Speaker, when a plain statement of fact is made to the house by a spokesman for the government, in words as unequivocal as those appearing at page 2503 of Hansard of November 30, 1949:
There would then be no retroactive effect which would have a bearing on the cases before the courts,
the house should be entitled to rely on it. This discussion was in committee, and that assurance was followed two pages later by a statement on section 14 of the bill by the parliamentary assistant. I raised my point on section 5, and it applied as well to section 7. The parliamentary assistant suggested we wait until we come to section 14, at which time he had an amendment he was going to introduce which would meet all the objections. He then said:
There would then be no retroactive effect which would' have a bearing on the cases before the courts.
The committee then reached section 14, and the parliamentary assistant rose in his place and said:
This is the section on which the minister will move the amendment about which I spoke in answering the hon. member for Eglinton. The amendment is as follows:
"That subclause (2) of clause 14 of bill 175 be amended by striking out the words 'second day of May' and substituting therefor the words 'tenth day of November'."
That is the date when this change first became public knowledge by reason of the first reading of the bill.
Then Mr. Howe says, "I so move." The amendment was agreed to, and the section as amended was agreed to. Sir, no member of the opposition saw that amendment. You know what happens in committee on matters of plain amendments where the effect of the amendment as stated by a government spokesman meets the wishes of the house. An amendment is introduced in due course, and time does not permit copies to be circulated to all members so that they may study the terms of the amendment. It was an amendment that sounded plain enough to carry out the intent as declared by the parliamentary assistant, and with that unequivocal statement by the parliamentary assistant that this legislation would not have any retroactive effect, surely the house was

entitled to rely upon it. But what was overlooked, Mr. Speaker, was a very tiny amendment that should have been made in the schedule of the bill. This tiny amendment was overlooked. I am sure it was not overlooked deliberately by the parliamentary assistant, but the government has since completely ignored the unequivocal terms he used in referring to the amendment. Notwithstanding that, this government has completely broken faith with the house; it has tarnished the good faith of the crown by the course it has followed by trying to wrench these 1949 amendments to defeat the claims of persons who were told by the language used in the debate in the house that there would be no retroactive application to their cases.
I was not the only one, sir, who made representations to the government against making these 1949 amendments applicable so that they could have any bearing on the litigation before the courts. When I spoke on this subject recently I said an hon. member who was then a private member of the house on the other side, and who is now a member of the cabinet, also made representations, because he sent a note over to me on the occasion when the parliamentary assistant made his statement in the house intimating to me that he got word a few minutes before that this amendment was being introduced, and that it was in fact a triumph for justice.
There were other private members who were consulted about this, who made representations to the government to the same effect, and who understood, as every member of the house understood, that the parliamentary assistant was stating the fact when he made the representations to the house to which I have referred. I should like the Minister of Citizenship and Immigration (Mr. Harris) to say something in this debate about what he thinks of the way in which the government has wrenched and distorted these amendments enacted in November, 1949, in the very teeth of the statement made on behalf of the government as to their effect. I should like to hear what the hon. member for St. Paul's (Mr. Rooney) has to say about it, and there are other members of the house who interested themselves in trying to see justice done so that legislation would not be enacted so as to have a retroactive bearing.
The parliamentary assistant to the Minister of Finance has said with a measure of glee that to begin with there were ten of these companies who were plaintiffs in the action, that four of them withdrew before the case came to trial before Chief Justice McRuer, and that only one of them carried the case
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to the Court of Appeal. He puts that forward as a reason, if you will, why parliament should acquiesce in this breach of faith. Because one out of ten had the courage to carry his case to the Ontario Court of Appeal the parliamentary assistant says that the course of the four who did not go as far as trial is the best indication of what was fair or unfair in this situation.
I think it is to the highest credit of that one litigant who, not daunted by the dangers of standing up to the government in litigation, had the courage to take his case to the courts until he got as much justice as the courts were in a position to give him. I think it is a matter worthy of the highest commendation on the part of this house that any litigant, that any subject of the king, be he person or be he corporation, is not daunted by the totalitarian juggernaut of government, but is prepared to take his case to His Majesty's courts looking for justice, and justice would have been done in this case if the courts had been free to apply the law as parliament understood it and as the government represented it to be. Nothing could be clearer.
Sir, the story does not end there because, you see, the government disapproves of the action of this one litigant in carrying his case to the Court of Appeal. They disapprove, perhaps to a lesser degree, of the action of the other five who went as far as trial but did not join in the appeal. You see when governments-this government at any rate-disapprove of the action of a subject they can if they are vindictive enough make life pretty miserable for him because every individual in this country has to have relations with the Department of National Revenue. I find that a known subsidiary of the litigant that was successful in the Court of Appeal is already having its problems trying to obtain an appointment with the Minister of National Revenue (Mr. McCann) to discuss its legitimate tax problems on which they require an interpretation, but the Minister of National Revenue says that he sees nothing to be gained by discussing this question with them. The door of the Minister of National Revenue is apparently now closed to this litigant and its subsidiary corporation.
Sir, the story does not end there. This trail of vindictiveness is pursued. It happens that the very distinguished and eminent counsel who appeared for this plaintiff in this case- and I may say he is a very well known Liberal -was at the same time and has for many years been counsel to the Canadian Broadcasting Corporation and, if you please, recently he has been notified by the Canadian

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Broadcasting Corporation that they will not have occasion to require his services in the future. Is it mere coincidence that it is through the Minister of National Revenue that the Canadian Broadcasting Corporation is supposed to be responsible to parliament? It is this same minister who has been responsible for the position taken by the crown in this litigation in breach of faith with this house.
Sir, there is a tarnished record. There was a time when the honour of the crown was regarded as something unimpeachable and without blemish, but in the hands of this government the honour of the crown has been tarnished and has been blemished. Nothing will remove that tarnish on the honour of the crown except to do justice to these litigants. Even then this government will have fallen far short of repairing the breach of faith with this house. What ought to happen is that the government, speaking through the Prime Minister (Mr. St. Laurent), should offer an apology to this house for a palpable breach of faith with the house. Those who are responsible from the minister down should be brought to book for being parties to a breach of faith practised upon the house.


George Alexander Drew: Mr. Speaker, I think it must be a source of regret to many hon. members of this house, and I hope not entirely on this side of the house, that the Minister of Finance (Mr. Abbott) should not have seen fit to deal with the statement that has been made.


An hon. Member:: A reflection on the government.


George Alexander Drew: I hope he will still come in before the debate ends on this stage of the bill because, as one of the members just opposite has said, it is a reflection on the government. It is a reflection on the government that a lawyer of the standing of the hon. member for Eglinton (Mr. Fleming) should place before the house clear and unchallengeable statements as to undertakings that were given, and that the minister responsible should not see fit to answer those very serious charges, dispose of them, and not leave it to his assistant who, whatever his qualifications may be, is not competent to interpret the legal aspects of this question.
The statement has been made, and made with clear reference to the Hansard record, that assurance was given that the legislation then before the house would not have the effect of depriving litigants, whose cases were then under consideration, of the rights they possessed. Nevertheless in the manner

that has been described the result of amendments introduced at that time was to deprive these litigants of their rights. I wish to reemphasize what has been said by the hon. member for Eglinton. Far from being any answer to the clearly described impropriety of the government's action in this case, the argument put forward by the parliamentary assistant to the Minister of Finance this afternoon only aggravates the situation. He tells us that of ten companies who were seeking to be relieved of the effect of that legislation, only one carried the case to appeal. Far from being a source of satisfaction to the government, that should be recognized as a reflection upon the whole attitude that is developing and the fear that is being aroused in the minds of corporations that if they do assert their rights they will suffer in some other way at the hands of this government. Let no one be under any illusions that all that took place in connection with those cases was what was discussed openly in the courts of this land. One company did have the courage to carry the case forward, and the judgment in that case made it perfectly clear that no matter what the original intention actually was on the part of those who presented the amendment, the effect was directly contrary to the undertaking that was given.
The case has been clearly stated by the hon. member for Eglinton (Mr. Fleming) with the legal ability he is known to possess; but apart from the legal considerations there is the fact that unless this is to be more satisfactorily dealt with than it has been, unless it is to be dealt with by the minister who is competent to do so from the legal point of view as well as from the standpoint of governmental responsibility, which is also something the assistant cannot do, then we are left in the position that members of this house are unable to accept any assurance given by the assistant to the Minister of Finance. That carries us right to the present position. Either the minister backs up the statements of his assistant or he does not. If he does not we are no longer in a position to rely upon the assurances given in that way. So we have the two aspects, one the wrong that was done at the time this amendment produced a result entirely contrary to what was stated, and the second the fact that unless this is dealt with in some way we shall be unable to rely on further assurances that may be given.
We are now dealing with legislation that will have far-reaching consequences, legislation which calls for assurances of various kinds, particularly when we are in committee. The effect of this statement is all too

much like the statement already referred to: "If we wanted to get away with it, who would stop us?" The government feel they can get away with it, and challenge anyone to stop them. That attitude apparently is not confined to one minister or one department, if this matter is allowed to stand as it is now.
To come to the question of the bill now before the house, the hon. member for Greenwood (Mr. Macdonnell) has introduced an amendment asking that this bill be not proceeded with. One hon. member who indicated his objection to certain of the contents of this measure also indicated that he had some reluctance in supporting this motion because there were things in the bill of which he approved as well as those of which he disapproved, and evidently for that reason he felt that it was not appropriate to support a motion which obviously would have the result of deferring consideration of the bill in its present form. On the second reading of a bill it is not possible to rewrite the legislation, nor is it possible to change the detail. I submit to all hon. members, however, that if there is in the bill something manifestly unsatisfactory, it is perfectly proper that a vote should be cast against the bill containing those unsatisfactory features. I would point out that in addition to the increase in sales tax there are reasons which suggest the advisability of deferring consideration of this measure. As has been pointed out already by the hon. member for Greenwood, the surplus already disclosed by the Department of Finance indicates that the increase in the sales tax as well as other provisions are not necessary to raise the money required to meet the budget that has been placed before the house. Therefore the government would be in a position to concur in a motion of this kind and re-introduce a bill deleting those provisions. By doing so it would impose only those taxes which it is now clear will be adequate for the purposes of this budget, and that is all the government should seek to raise.
I would point out that in addition to the sales tax other matters have been mentioned which are included in this bill. No satisfactory explanation has yet been given of the prejudicial attitude taken toward electrical appliances, as indicated by the fact that cooking stoves which do not use electricity do not pay the extra tax, while cooking stoves using electricity have to pay this special tax of 25 per cent. In this country we have every reason to encourage the use of electricity, particularly in the rural areas, because of its economy and simplicity. Far from discouraging the use of electricity, the taxation policy of this government should recognize
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the extent to which electricity is bringing better living conditions in many parts of Canada.
Going beyond that, however, it is difficult to see how the distinction was drawn between those things regarded as luxuries and those things not so regarded. In the first schedule of the act, for instance, we find that electrical appliances of various kinds carry this special 25 per cent tax. There may be those who will agree that curling irons or tongs may be in the nature of a luxury. There may be those who will agree that food or drink mixers are in the category of luxuries. But surely irons and ironers, kettles, toasters, washing machines and things of that kind are no longer luxuries in this modern age. To go further into the provisions of schedule I, we find that such things as stoves, hotplates, grills and other appliances when adapted wholly or in part for cooking and when designed for using other than solid fuels, are included. They must be designed for cooking. Is the government trying to stop people cooking in their own homes? There seems no other reason for the special provision that they must be designed for cooking if they are to carry this tax. If they are not so designed the tax does not apply. This whole thing seems to be approaching the requirements of our people in these days from the wrong direction.
I want to refer further to some of the provisions in schedule III. We find that where a stove has two kinds of cooking facilities the part using electricity is taxed while the part using solid or other fuel is not. In other words if we import coal or oil, as we still do in substantial quantities in this part of the country, stoves using those fuels are not taxed. But if we use our own electricity for cooking, those stoves are taxed. There has never been a more unreasonable, impractical application of taxes in this house than this provision with respect to cooking equipment.
Of course, if the answer is that it is intended to cut down on the use of steel, then perhaps it might be interesting if the minister or someone competent to speak on behalf of the department would tell us why it is that, as an example, there is no tax of this kind on filing cabinets which use more steel than any of these cabinet arrangements of this kind which will be taxed in this way but are used in the home. While we have wood that we grow, and while as yet there appears to be no critical shortage of wood, I suggest that we should be discouraging the use of steel in filing cabinets and boxes of that kind more than its use in

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refrigerators, washing machines and things chat people use in their homes in these days.
These provisions are covered in this bill. They are bad, and for that reason a blanket opposition to this bill is sound, although there may be some features in the bill which are perfectly good. But then we come back to this sales tax. The minister himself made it perfectly clear that even though a tax can be justified up to some point, there comes a point beyond which it is no longer sound to keep extending that tax. When it was suggested by some members of this house that possibly the tax on alcoholic beverages might have been increased, the minister explained that there is a point beyond which taxation of that kind cannot go and still be sound. In saying that he recognized the fact that a tax may be justified, in the opinion of the government, up to a certain point, but that at some point it ceases to be a sound tax.
I am not prepared to concede the soundness of the sales tax at any point, no matter how much it may have become embedded in our system. We all recognize that some of these things that are carried on for years are difficult to dislodge. But if the government has passed the point where it is sound to increase taxes on alcoholic beverages, certainly it has also come to a point where that principle should apply with equal force to the things that people are buying for their daily needs in these days of increasing inflationary pressure.
Therefore, Mr. Speaker, the only way that the members of this house can register their objection to this further increase by 25 per cent in the sales tax at this time is to vote on an amendment which indicates that the bill should not be proceeded with at this time. That is the amendment before the house, and it is one which I would hope we would see supported by some of the hon. members in this house who do not sit on this side of it. By the announcement that has been made as to the surplus for the first month, the government have demonstrated that they do not need this inflationary tax-this tax which bears most heavily on the people least able to afford it, this tax which mainly soaks the poor-when they already have for one month a surplus that would nearly equal the total amount they are going to raise in this way. On further consideration I hope that other members of this house, besides those who have already indicated their support of this amendment, will speak on behalf of their people who should not be called upon to pay this tax.


Stanley Howard Knowles: Before the question is put, Mr. Speaker, I should like just about two minutes. I think the house should realize that during the period of a little over four months during which we have been here for this session the cost of living index has risen by 9-5 points. I ask the house to compare that rise in four months with the fact that during four years, from 1941 to 1945, the rise was only 7-8 points. In four months this year we have had a greater rise than we had during the whole four years under price control.
That fact supports the argument that we in this group have been making, namely, that price controls and subsidies are necessary. We still call for their introduction. The government has the power to take action, and we contend that it should be taken. But at the moment what we have before us is this bill which, amongst other things, imposes this drastic increase in the sales tax. It seems to us that the least that parliament should do at this time, in order to try to check this rising cost of living, is to reject this proposal for increasing the sales tax. It is because the amendment now before the house is intended to express the opposition of members of the house to that increase in the sales tax that I for one feel that the amendment should be supported.


John Lambert Gibson: I supported the budget when it was passed here; but after listening to some of the arguments advanced tonight, I think there is a good deal of merit in what the hon. member for Greenwood (Mr. Macdonnell) said. I have been here since 1945. I know that is a short period, but in that period it seems to me that we have collected from the Canadian taxpayers about one and a half billion dollars more than we as a parliament have sanctioned.
I admit that the Minister of Finance (Mr. Abbott) should probably be congratulated on having achieved these surpluses. I will admit that he is probably being honest when he tells us that he did not expect them and that he gave us an honest guess. But to be quite frank, it is almost impossible for me to realize that the minister and the high-class talent that he has around him in preparing these budgets could be so far wrong, particularly last year with the $343 million surplus, I think it was, that we had. It seems to me that it is more than was justified under the circumstances.
Actually he comes out finally with a surplus of $203 million. But he could give away $65 million to the wheat farmers. That was a good garbage can in which to hide some of his surpluses. He found he could spare another

$75 million to put into the civil service superannuation fund. I wish he had told me he was getting rid of some of these surpluses, because I had several suggestions as to where he could put some of them; there were things in which I am interested, including the pilotage fund as to which I heard the Minister of Transport (Mr. Chevrier) say that he felt that the government could not afford any assistance at this time.
I think at times we are probably a little bit unfair to the minister. He is a modest chap. He always tries to make being Minister of Finance seem the simplest thing in the world. I often think that it would be better if he were like our former ministers of finance and had a long beard or something. Maybe he would look more profound. But I think that we have for too long taken the easy assurances of the minister. He says: We are going to have a $20 million or a $30 million surplus this year. It seems to me that may be true if he is able to hold the cost of living and the present purchasing power of the diollar, something which I do not think he or the government is at all certain of.
I am a great believer in balanced budgets. But it seems to me that this one and a half billion which we have collected-which the minister has not anticipated-since the war, could probably have been used by Canadian investors in this time in acquiring interests in our Labrador iron, for instance, or probably in our Alberta oil fields.


James Sinclair: For debt reduction.


John Lambert Gibson: Debt reduction in itself is a fine thing. But I would point this out to the parliamentary assistant. He is a young man. He may have read at some time what was said by Henry Ford, a very wise old man. Henry Ford said that he would advise every young man to go into debt when he was young and then to get himself out of it in due course when he was able to do so. I feel that in Canada today we have a young country. I should like to see the capital that is put into Canada put in by Canadians. Certainly we are not going to do it if we take one and a half billion dollars more than we need out of the Canadian public. Actually, I think the cabinet should be very much concerned. They know very well that the $2 billion surplus that they have collected from the Canadian people has been collected since the war as the result of inflation. We can say that in some measure they are responsible for it. I realize it is a world-wide condition, and I would expect that prices would go up to some degree; but when the government sits back and very complacently says, we have $2 billion surplus, and are very proud of it, I say that the only reason that they have got
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the surplus is not through extra good management of Canadian affairs. I can tell you that. I do not think anyone in the government would be complacent enough to say that. The reason you have it is that there has been a drastic reduction in the purchasing value of the Canadian dollar, and as a consequence there has been a greater dollar volume of business going through.


Mr. Stick:: Have we not prosperity?


John Lambert Gibson: We certainly have prosperity. I am very glad to say that we have that factor in our economy, but a little criticism of this government will not hurt it. They are safe in their position, and there should be a little sound criticism of the government.
What I would like to point out to the government is that since they have this money I wish they would use it with as much of their infinite skill as they display in collecting taxes, and try to get some of the money that they have collected fortuitously from the Canadian people by reason of inflation back to the people who are suffering the most in this country from the effects of inflation.
When the late prime minister, Mr. Mackenzie King, introduced his first proposal in regard to pensions in this house, which was sanctioned by the cabinet-I imagine it must have been-he suggested that we were just going to raise the veterans pensions by 11 per cent. Everybody on the government side thumped his desk and said that that was fine. It did not seem quite as much as it was expected. After a while quite a lot of criticism developed in this country and then they put the ante up to 17 per cent. Finally we came down here and we put these pensions up to 25 per cent where they should have been in the first place. We find now that the same thing is taking place in the veterans affairs committee. There is to be a means test. I would think the government would be wise to take this $2 billion which they have accumulated since the war and see if they can get some portion of it back into the hands of the people who have suffered the most from inflation.


David Arnold Croll: Was the hon. member in the
house at three o'clock?


John Lambert Gibson: I have no illusions as to
where the money is coming from for old age pensions. I certainly hope the government has enough common sense now to realize that the $350 million for old age pensions has to be collected out of the people who are going to receive them. Do I understand from the hon. member from Spadina (Mr. Croll) that we are not going to finance this currently

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as we go, or are going to dip into our past surplus? I do not think so. I just feel the government should be very careful now. We have this surplus of $2 billion now, and it looks as if we are going to have a very substantial surplus again this year, judging by the way the figures are going. Quite frankly, I am not sure that the minister himself needs this extra 2 per cent sales tax to get the surplus that he expects to have. For the salutary effect it might have on the government I am going to support the amendment of the hon. member for Greenwood (Mr. Macdonnell).


John Horne Blackmore: The
principle of this bill is that certain forms of excise tax ought to be levied on Canadian commodities in order to raise certain sums of money from Canadian consumers for the defraying of divers governmental expenses. The stated or implied reasons for such procedure are:	First, that the withdrawal of
active purchasing power from circulation to the extent of the sums involved will constitute anti-inflationary measures. Second, that the acquisition by the government of the sums of money involved is unsound unless such money is obtained either through taxation or borrowing. I personally challenge the validity of each of these two reasons.
I personally contend that the cause of the high prices presently prevailing in Canada is not scarcity of goods in relation to the money in active working circulation, but that the cause of our so-called inflation has been deliberate profiteering forcing up costs of production. As I have pointed out, the first step in this spiral of inflation was the deliberate advance of $5 a ton in the price of steel, permitted by this government in 1946, and it had nothing on earth to do with the money in circulation, or the scarcity of steel or the inability of Canadians to produce more steel; and the increase in wages by reason of the strike in the steel works in 1946 again forced up the prices, and had nothing on earth to do with the surplus of purchasing power in relation to the goods.
That same principle followed all the way through will explain the rise in prices right up to the present time. And why it is that it takes so long for so man}' people in Canada to see that is beyond my comprehension. To imagine that we can force back the price of steel for instance by any degree of taxation in this country is simply fantastic.
I personally maintain that the sums of money proposed to be raised by the imposts contemplated through these taxes in this bill can be safely taken from the Bank of Canada, and spent into circulation by the government without inflationary effects

through monetary influences. I do not say that doing that will keep people from stealing from each other if you permit them to increase their prices beyond what they have a right to increase them by; but I will say that if suitable control measures are adopted there will be no inflation by taking that money from the Bank of Canada.
My reason for this assurance is that the supply position in Canada at present is such that the said sums would be absorbed by surplus goods existing in Canadian inventories in May, 1951, and coming into existence through Canadian productive facilities now in operation. I therefore personally oppose the principle of this bill.
I maintain personally that Canadian supplies are as adequate as I have indicated. Some of the reasons why I believe this I propose to give. I may be wrong. It is difficult for us to be sure about the supply position in the country. I can go only by the evidence we are able to obtain. Of course, if there is not enough supply in Canada to support the money I propose, then something would have to be done in the way of controls and even rationing in order to prevent a rise of prices because of too great demand for the supply.
I have already referred to the statement made by the Minister of Trade and Commerce on April 9 as reported at page 1762 of Hansard. May I read it once more:
I am sure that we can get along quite comfortably as consumers and still engage in a substantial defence effort. A few things may in the course of time become unavailable or relatively scarce, but standards of living will remain high. Unless all-out war comes, Canadians can continue to live well.
These words have only one possible meaning, coming from a man as cautious about his wording as is the Minister of Trade and Commerce. They must mean that the supplies are adequate in Canada. If they are, I maintain the money can be created by the Bank of Canada, can be borrowed from the Bank of Canada by the dominion government and spent, without any such iniquitous taxes as are proposed in the present bill.
Let us look at some of the details in respect to supply. How are we off for food in Canada? I am getting my information from an authentic letter of May 16, 1951. Production and supply of most foods is well ahead of a year ago. What about flour? Well, it is reported to me that our flour supply was up about one-third' in January. What about other cereal products? They are in good supply. What about our fluid milk? Temporarily down, because of foolish governmental mismanagement, but I am told there is a long-run increase. What about butter? No real scarcity. We have made a mistake. In connection with

margarine we have made a serious blunder in respect of our dairy industry, but we can easily retrace our steps and undo the blunder. What about beef? There has been a governmental mistake again in connection with beef. But it certainly is possible in Canada to produce enough beef, and if we cannot now produce enough beef we can ration it until such time as we do, in the future, have enough beef.
What about pork? I understand our pork supply was ten per cent higher this year in January than it was last year. There was almost a one-third increase in stocks in Canada. What -about fish? I understand that landings were 12 per cent higher and that storage was 15 per cent higher than in 1950. What about eggs? I am told that the shortage of eggs -at the present time is largely in reference to the export of eggs, but that we have plenty of eggs for the home market.
What about sugar? Production and supply are ahead of what they were. Stocks in January were over 30 per cent higher than they were before. What about potatoes? Everyone knows what happened to potatoes. The supply is far in excess of what we are able to use. What about fruits and vegetables, canned and fresh? We have -a larger supply than we had last year and it is ample.
What about prepared foods and beverages? The same applies to them. Our supplies are ample for our requirements. What about clothing? In connection with cotton yarn, I am told that we had 20 per cent more bales of cotton opened in 1950 than in 1949. That does not indicate a shortage of supply. We may be selling a good deal of it abroad, or using it in other ways. But, so far as the supply is concerned, we are in a sound position. We had a ten per cent higher opening of bales in January 1951 than in the preceding January. We have increased our yarn and our cloth supply.
What about our woollen supply? I understand that woollen cloth shipments were up about one-third in December of 1950 over the previous year, and our inventories were up a [DOT] quarter. That does not indicate a shortage of supply.
What about hosiery? Shipments had increased by one-quarter, and stocks also were higher. What about knit goods? The same is true as in the case of hosiery. What about boots and shoes of all kinds? They were higher in the last quarter of 1950 than in the year earlier.
Then, what about housing? Here is a general comment on housing-and let it be
80709-23G
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understood that I am not defending the housing situation, because I think the government has made one of the most serious blunders in respect of housing; I would say more about it if this were the appropriate time to do so. This is the note I find in the document before me:
A total of 89,015 new housing units were completed in 1950, approximating the record of 1949. Since the number of starts was 92,531 (a little greater than 1949) the number under construction at the year end also showed an increase, and amounted to 60,538. This would suggest a continuing high level of completion in the first part of 1951.
I believe this could be maintained, by the exercise of a little bit of care. Certainly there is no reason why we cannot produce a great number of houses of a lower value for those in lower income brackets. The fact we do not do it is the result purely of government mismanagement.
Then, what about furnishings? Furniture is in good supply. I am told, too, that there is a good supply of floor coverings. The supply of electrical apparatus was up by 25 per cent at the end of December, 1950. What about sheet metal products? Shipments increased by 90 per cent over the previous year. Stocks, at the same time, were at the same high level.
Then, what about hardware? The situation is substantially the same as in the case of sheet metal products. What about soaps? The supply has increased markedly over the year, and inventories are again higher. What about paints? The same observation applies as in connection with soaps.
Then, what about fuel and lighting? I find there was 40 per cent more coal available for consumption in the latter part of 1950 than there was in 1949. Our oil supply seems to be adequate; we have no difficulty obtaining it. What about gasoline and gas? We seem to have plenty of it. What about manufactured gas? The supply has increased. What about natural gas? The sales increased by almost 40 per cent late in 1950.
Here is an example of the kind of thing that is happening in respect of fuels. Let us take coal. I read now from a document which came from the Canada Information Agency, of which Mr. John S. Connolley is director. This article is dated May 31, 1951, and says:
Lately the mechanical efficiencies of the oil and gas industry have been very much in the news, especially in North America. But the changes planned in the coal mining industry are just as spectacular and worthy of attention.
One of the latest mechanical devices being introduced into the soft coal industry of the United States is the continuous mining machine. It provides the nearest approach yet made to continuity of production at the coal face. The machine promises to telescope the four conventional steps

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of modern mining-cutting, drilling, blasting and loading-into one operation. Usually these steps have needed separate machines and separate crews.
The new "do-all" machine cuts and loads at the coal face in one operation and does away with the need for drilling and blasting. Demonstrations have shown that the coal industry must develop faster methods of transporting coal away from the new high-speed machines in order to allow them to operate without a pause. Where they have been tried, they have, under certain conditions, tripled the output of miners at the coal face and lowered the costs of production.
Several types of these machines have already been developed in the United States. One is a chain-cutter which rips the coal out, another chips it away, a third is a burster-type machine and others wedge out the coal or break it loose with vibrators.
Several types of conveyor systems have been evolved to work with the cutting machines. One which has been in use in West Virginia for almost a year Is reported to have moved coal from the face at the rate of 45 tons per man-shift. The usual average with other methods was about ten tons per man-shift. Another new conveyor type is the "piggy-back" machine. It literally rides piggyback on the loading machine at one end and on the first unit of the.transportation system at the other, making possible a continuous movement of coal to the surface. It can be used with the conventional loading machines or with the new continuous mining machines.
I see no indication there of any possible shortage of coal, if we chose to introduce this machinery. Then, our gasoline supply is more than five per cent higher than at the year's end.
Then, what are some of the general facts? Were retail sales during January and February, 1951, greater or less than in the same two months of 1950? They were almost 19 per cent greater. Again, were sales in grocery stores up or down? They were up by 13 per cent. Were sales in country general stores up or down? They were up by 15 per cent. In department stores they were up 16 per cent. Sales of family clothing were up 13 per cent, and sales in shoe stores were up 19 per cent. Then, motor vehicle outlets indicate that sales were up 47 per cent. What about lumber and building materials? They were up 20 per cent. What about household appliances? They were up 23 per cent.
This all indicates there is an adequate supply. True, people are buying freely, but the supply must be coming along. What other general facts can we state? Inventories on hand available for shipment-what about them? Were total inventories of goods in December of 1950 higher or lower than in December of 1949? They were 10 per cent higher. How did this apply to non-durables? It applies only slightly. How did it apply to semi-durables? It applied only to the extent of 20 per cent. How about durables? It applied to the extent of 30 per cent.

Does a general survey of major commodity groups important to the welfare of the Canadian economy indicate any serious shortage of consumer goods? The answer is No.
What about steel? Well, the steel situation seems to be somewhat beclouded. The report seems to be different, depending upon the person one talks with. However here is a press clipping which I think is worthy of note. It is dated at Ottawa, May 8, a Canadian Press dispatch and states:
Trade officials said yesterday that the steel situation in Canada is gradually moving towards stabilization.
Though the need' still is for more steel, boosted production and increased supplies from the United States had lifted some of the pressure from a critical situation that existed earlier this year, the officials said.
"At least, we can see where we are going," one authority said. "With the supplies we've got, and those we hope to get, no emergency program in Canada should suffer."
The trend towards stabilization will mean no immediate easing of current steel controls, levied mostly against the construction industry. However, as long as it continues, it would1 mean that further controls planned would not be enforced.
That indicates that our steel production is coming into good shape. Since all these things are true, and if I correctly interpret them, I think there can be no reason under the sun why we should make any further reduction in the purchasing power in the hands of the people. We are able to produce enough goods, just as the Minister of Trade and Commerce said, unless we get into allout war. We are able to produce enough goods to supply comforts to the people of Canada. I maintain that all these imposts we are contemplating in this bill, virtually every one of them and particularly the increase in the sales tax, will decrease the comfort of the people. We have already cut down the practical purchasing power of a large percentage of the Canadian people to a point where it is painfully lower than it was ten years ago.
I believe this situation is very serious, Mr. Speaker. I suggest it is easy enough for a country like Canada to begin looking down, to begin to think we cannot do big things. This country of Canada is capable of tremendous achievements. All we need to do is to manage it right, have faith in ourselves and adopt sound financial and economic measures. Then, we shall not have to bring into existence such taxes as these, which we have now, in order to raise money. We can create money through the Bank of Canada.
Mr. Speaker, I do not propose to go into detail, but I am going to draw the attention of those who desire to read something about this matter of creating money to Hansard of April 19, 1951, pages 2195 to 2202; April 30,

1951,	pages 2519 to 2526; May 1, 1951, pages 2558 to 2563; May 22, pages 3303 to 3305, where I discussed the Guernsey island situation; May 23, pages 3314 to 3318, where I discussed the greenback situation.
I maintain that if the principles that are laid down in those pages are adopted by the government in power it is ridiculous for us to talk about having to adopt imposts such as these to raise money on which to run the country, raising the price of goods at the same time. We can only make one disastrous mistake, and in my judgment we are on the verge of making that disastrous mistake. If we go too far and break things in this country and bring on a depression while a war is in progress we shall have real trouble. That is an extremely easy thing to do. There have been three or four danger signals hung out by men who are particularly qualified to speak about these matters. There was an announcement over the air today by one eminent man to the effect that if the government went on with the control of credit there would be widespread unemployment. Let widespread unemployment appear in this country and I shall defy this government, or any three governments with no more intelligence than this one, to tell us how to get out of it. It is easy enough to break down the confidence of the people so they will go out of production and go into ruin, but it is a difficult thing to build up their confidence. The men who were in power in this country during 1931, 1932 and 1933 found that out. I urge, Mr. Speaker, that we do not adopt any more injurious methods of this kind, but that we begin to canvass the possibility of financing our needs by sound economic methods.
I am therefore, Mr. Speaker, personally unalterably opposed to the principle of this bill. I am going to oppose it with all the energy I have, and I am going to vote for the amendment.


Mr. Browne (Si. John's West):: T was
paired with the hon. member for Yukon-Mackenzie River (Mr. Simmons). Had I voted, I would have voted for the amendment.


Mr. Caiherwood:: I was paired with the
hon. member for Kent (Mr. Huffman). Had I voted, I would have voted for the amendment.


Mr. White (Middlesex East):: I was paired
with the hon. member for Middlesex West (Mr. McCubbin). Had I voted, I would have voted for the amendment.


Mr. Quelch:: I was paired with the hon.
member for Burin-Burgeo (Mr. Carter). Had I voted, I would have voted for the amendment.


Mr. Speaker:: I declare the amendment
lost. Is it the pleasure of the house to adopt the motion?


Some hon. Members:: On division.

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Motion agreed to on division, bill read the second time and the house went into committee thereon, Mr. Dion in the chair.
Section 1 agreed to.
On section 2-Duty paid value.


James MacKerras Macdonnell: I want to
ask a question with respect to section 2(b)
(ii) .	I find difficulty in constructing that provision particularly by reason of the inclusion of the words "advertising, financing, servicing". I am wondering exactly how those fit into the definition of "sale price". My question has regard particularly to the wording of section 2, which amends section 79 of the act. Paragraph (b) provides:
"Sale price," for the purpose of determining the excise tax payable under this part, means the aggregate of
(ii) any amount that the purchaser is liable to pay to the vendor by reason of or in respect of the sale in addition to the amount charged as price (whether payable at the same time or some other time) including, without limiting the generality of the foregoing, any amount charged for, or to make provision for, advertising, financing, servicing, warranty-
My question first of all has to do with the word "servicing". If your original charge includes something for servicing I think I can understand the significance and perhaps the reasonableness of the definition, but suppose servicing is something paid for from time to time by the purchaser later, which I take it is quite possible. Will that then be included in the amount taxed?


James Sinclair: Servicing which is part of the condition of sale is included in the sale price. Later servicing, if it is a separate item, .is not included. If the hon. member will turn to the next page and the explanation for section 5 he will see that section 2 and section 5 actually define the same thing, sale price. Section 2 has relation to the excise tax and section 5 tc the sales tax. Actually the wording is the same. The cost of servicing, of warranties, of advertising if need be, if included* in the cost of the sale is part of the sale price. This is the present practice and has been continued in exactly the same form for the establishment of sale price for the purpose of levying excise tax as for the purpose of levying sales tax. The note on the right hand side of the second page under section 5 is perhaps better than the note on the first page.


William Joseph Browne: In paragraph
(iii)	apparently the sale price includes the amount of excise duty paid also.


James Sinclair: That is excise duty, not excise tax. Sale price includes customs or excise duties, that is duties on liquor, for example, in

a warehouse, or a distillery. When that moves out it has paid its excise duty, and it then becomes subject to sales and excise taxes. Those latter taxes are levied on the same price; they do not pyramid, but the sales tax is levied on the cost including the customs or excise duty.


William Joseph Browne: You mean the sales tax is levied on the price of the goods plus the customs or excise duty?


James Sinclair: That is right.


William Joseph Browne: Does the excise duty apply to other articles than tobacco and liquor?


James Sinclair: Just those two.


James MacKerras Macdonnell: I come back: to the word servicing. The parliamentary assistant has told us what it means, and that it would cover a servicing charge paid subsequently from time to time. However, I do not see that this is clear from the wording; and from what has occurred already in this house tonight we want to be very clear as to the meaning of things.


James Sinclair: As an example, most refrigerators carry one year's free servicing. That is a condition of sale, and of course that cost [DOT] to the company giving the guarantee is embedded in the cost of the refrigerator. At the end of that year the owner can enter into other servicing arrangements for the next three or four years, if need be, either with the company from which he bought the refrigerator or with another company. That is a separate thing having no relation to the sale price. The actual service given for the first year is a cost to the company providing that service and selling the refrigerator, and under this definition that cost is embedded in the sale price.


James MacKerras Macdonnell: That seems very reasonable, and I do not doubt that it is so, but it does not seem to me that this wording makes clear that it is so, and I am wondering whether there should not be something to make it perfectly clear.


James Sinclair: All I can say is that this is the exact wording in the present act, and that is the policy that has been followed. There is no change in this wording, as the hon. member will see if he looks over the bill.


James MacKerras Macdonnell: It is not
quite as clear as that. In tne explanatory note I read that hitherto the absence of a definition of sales price to cover the excise tax has left the basis of application of the tax uncertain. Am I not right in thinking this is supposed to introduce a clarity that has not been there previously?


James Sinclair: This is here to make it abundantly clear that the same basis is used to ascertain the sale price for both the excise tax and the sales tax. Previously, as far as the levying of the excise tax was concerned, there was no specific definition of sales price. The sale price definition used was that spelled out under the sales tax. Now under both the excise tax section and the sales tax section we are having exactly the same definition we now have in the act for sale price with regard to sales tax.


Mrs. Fairclough:: The word "financing" I presume applies to finance charges which may be collected on deferred payments. Are they added to the cost of the article before the imposition of sales tax?


James Sinclair: All this, of course, is not at the consumer level; this is the manufacturer selling. If the manufacturer is selling these articles on time, then the cost of his financing is included in the cost price of the refrigerator, for example. After all, that is the only place he can put it.


Ellen Louks Fairclough: Supposing the financing is done by an outside corporation. Do you charge sales tax on the finance charges in that case?


James Sinclair: If it is done by an outside corporation, no; only if it is done by the company selling the article.


Ellen Louks Fairclough: Some of these people add their finance charges and then turn around and refinance with finance companies. What happens in that case?


James Sinclair: Once again, the purpose of this is to see that the sales price by the manufacturer to his customer is the actual selling price including the cost of the goods and the
Excise Tax Act
cost of financing and servicing. The actual object here is to prevent a manufacturer breaking up his selling price into a variety of items and saying there was so much for the actual material, so much for the cost of servicing for the next year, so much for the cost of carrying the retailer's finance charges for a year and so on, and then saying the sales tax should be levied only on the actual cost of the material. We regard the sale price as the cost at which the manufacturer sells to the retailer, including all these costs he has incurred.


Ellen Louks Fairclough: Then if a manufacturer allows a discount for cash do you permit him to apply the sales tax to the net amount after the discount has been deducted?


James Sinclair: That is quite right.


Joseph-Alfred Dion: Shall the clause carry?


James MacKerras Macdonnell: No, Mr. Chairman, it is eleven o'clock.
Section stands.
Progress reported.



BUSINESS OF THE HOUSE

Alphonse Fournier: Tomorrow we will give third reading to Bill No. 295, to amend the Customs Tariff. Then we will proceed with the two budget bills, Nos. 294 and 296, the Excise Tax Act and the Income Tax Act. Then we will take up Bill No. 322, respecting the Canada post office; Bill No. 194, to amend the Emergency Gold Mining Assistance Act; and for good measure Bills Nos. 344 and 355.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Tuesday, June 5, 1951